For Capitol Hill bar and restaurant owners, the discussion of a higher minimum wage in Seattle starts with tips and the smallest indie businesses making their way in the neighborhood’s bursting food and drink economy.
Lost Lake Cafe owner Dave Meinert said if a straight hike to $15 an hour happened tomorrow, the change would be a “doomsday” scenario for indie businesses, and would likely mean drastic cuts in hours at Lost Lake and could force the owner out of the diner business altogether.
“If we’re wrong and we jump the raise too high and too quickly, small businesses close down and big business fills the gap … it would kill the culture of the Hill,” Meinert said, adding that he fully supports a discussion about raising the minimum wage and believes a full-time job should support a worker living in the city.
Meanwhile, CHS is aware of at least one group of Capitol Hill small businesses that has discussed plans to counter the push for a $15 minimum wage in Seattle.
Several other food and drink business owners tell CHS they already pay their workers $15 –with tips — but that increasing the base wage would strain their businesses considerably.
The march toward a $15 per hour minimum wage in Seattle — both politically and boots on the ground — has begun causing some in City Hall to claim it’s not a question of if but when. So another question might be, “How?”
Some independent restaurant and bar owners on Capitol Hill have serious reservations about an across the board 63% hike to the city’s minimum wage. CHS hopes to talk with Capitol Hill retailers next about the issue — if you’d like to be part of the conversation, let us know at firstname.lastname@example.org. While it may not be shocking that the restaurant and bar owners would prefer a cautious approach to raising Seattle’s minimum wage, the details of their concerns and thoughts about the change reveal they’re ready to have a discussion about how to do it right.
In an email to CHS, Poppy owner Jerry Traunfeld laid out the need for tip credit in a major wage hike (allowing workers to get to $15/hr through tips):
Like many other restaurant owners I’ve always struggled with the inequity between front of the house and back of the house wages. Those in the front of the house make much more in tips, and they end up making a significantly higher wage while working far fewer hours. When there is a minimum wage increase every January, the only employees in my restaurant that benefit are those who are already making the highest total wages per hour, since servers and service assistants are the only ones in the restaurant receiving the base minimum wage. If, like in many other states, we were allowed a tip credit, where we could pay a lower minimum wage to those employees making most of their income from tips, I could happily raise all of my kitchen worker’s wages to at least $15. Profit margins in restaurants are very low. If minimum wage jumps to $15 an hour without a tip credit it would force me to raise my prices and/or cut back on staff, and it would certainly jeopardize the health of my business.
But raising prices might not be an option everywhere. An owner of a popular and affordable Capitol Hill restaurant said he supports a living wage but a bump to $15/hr for all his workers would require him to pass on that expense to customers. “I feel like a lot of my lower income clientele might not be able to afford the price increase or that it would be somewhat of a hardship for them,” the owner, who opted to participate in this report without being identified, wrote in an email to CHS.
Another high profile restaurateur also opted to provide insight “off the record” at this point — “We love our employees,” she said. “But we would be talking hundreds of thousands of dollars. Prices will go up.” That owner said her biggest fears were for restaurants and bars trying to make it through the first year of operations. She also wondered how the Hill’s already challenged retailers could absorb the higher wages.
A representative of Molly Moon’s Homemade Ice Cream, often a big supporter of worker’s rights issues, said a $15 minimum wage without a tip credit would be difficult. “If the base rate for an employee receiving tips is $15, that might not be sustainable,” wrote Emilia Arnold.
Another owner of a Capitol Hill bar who also manages a manufacturing business said the tavern and the larger business would still pencil out in a $15 minimum economy:
Our businesses would survive. We pay most everybody at XXX $15 or more. But I know the topic is complicated and contentious. What may be good big-picture may not be good for individual small businesses. Some of those business owners are friends, and I’d be devastated to see those guys go under.
The $15 “with tips” goal appears to be a standard component for many owners on the Hill. One first-time owner preparing to open his venture on Capitol Hill said surviving his first year would be “a tough proposition” if the $15 rate became mandatory instead of tip-driven. How any proposed minimum wage law could include tip/non-tip classifications is yet to be seen. Another legislative tweak that could come into play could be an exemption for businesses with few employees. Seattle’s paid sick leave rules signed into law in 2011 apply only to businesses with five or more employees.
“This will mean the restaurant business in Seattle will finally be equal with how it treats people,” Banh said.
Banh, who said his non-tip employees range in pay from $12 an hour to $17, would raise his prices to continue to make his businesses work. But he’d be happy to pay more if the law requires everybody else to follow suite — even though he expects the change will be “painful” for the city’s restaurant industry in the near term.
“Fast food places need to be brought up,” he said. “If we all have to do it, then it will be fair and we’ll figure out how to make it work.”
Riding a swell of support from Capitol Hill, Kshama Sawant beat a four-term incumbent by pushing a $15 minimum wage as her cornerstone policy issue. In Hill-dominated Council District 3 Sawant picked up 58.4% of the vote, her best district, making her an obvious frontrunner for CD3 in 2015. But the next two years will be crucial, especially as Sawant begins working with the district’s influential mass of entertainment-dominated small businesses.
In September, then mayoral challenger Ed Murray announced he would also push for a $15 minimum wage, albeit cautiously. Murray urged the city council to pass a $100,000 study of the wage hike, which they did in November. Meinert, who backed Murray during the campaign, said he supports Murray’s incremental approach to a wage hike in the city.
“Business owners need to look at how much it realistically costs to live in the city,” he said.”But you also have to look at the realistic cost and risk of opening a business … if you pay everyone more, that doesn’t mean more people come in your business.”