Seattle celebrity chef and James Beard Award winner Tom Douglas does not approve of the $15 minimum wage law, and he was not shy about sharing his disapproval publically. Douglas warned that the price increases associated with the $15 minimum wage plan would be “hugely inflationary to the restaurant business and is irresponsible when considering business people who have long-term leases and investments based on prior economic models.”
“This is going to touch everybody soon, so I suggest you do your own math and see where it might affect your life. Can or will your employer still afford health care? Staff meals? Everything you buy from local produce to rent to childcare to your own meals out on the town will be affected. We do know that the City Council and Mayor’s office will still make their wage and enjoy their health and retirement benefits without fail.
“I would be lying to say that I’m not concerned with the outcome of this national experiment happening in the Seattle market. It is also not lost on me that our City Council and Mayor’s office have very little small business experience… the cost of failure is ours, the tax payers. Raises and benefits given to city workers are from our tax pockets. They might get voted out of office for their actions and decrees, but they won’t go bankrupt. It is inherently easier to spend other people’s money than the gut check of investing your last dime into a dream.”
At the start of the year, with the $15 minimum wage law beginning to hike wages upward, Douglas announced he would adjust to meet costs by ending tipping. Beginning February 1, a 20 percent service charge will replace gratuities at Dahlia Lounge, Palace Kitchen and The Carlile Room. The change will be “closely reviewed.” However, Douglas expects his other full-service restaurants will follow suit by the end of March.
Rather than wait for the law to take full effect, all employees will begin receiving $15 per hour immediately. The added 20 percent service charge (based on average customer tips over the past three years) will be used to pay wages, commissions and benefits. Douglas’ goals for the change including providing “greater compensation equity for front of house and back of house.”
Ivar’s in Seattle decided on a similar strategy to deal with the $15 minimum wage law, raising menu prices and changing its tipping policy to deal with the $15 minimum wage via a 17% service charge. The restaurant has told customers that, because service is included in the pricing of the menus, they no longer need to tip their servers or bartenders. Customers are welcome to do so, but it’s not expected.
Last fall, we learned a net number of 700 restaurant employees in Seattle have lost their jobs since the $15 minimum wage ordinance went into effect. The job losses mark the largest decline over the January-September period since the “Great Recession” in 2009. The figure sharply contrasts to the rest of the state where the restaurant industry added 5,800 new jobs.
Douglas’ earlier prediction has come to fruition. The $15 minimum wage law really is touching everybody, prices are increasing for consumers and over all pay is decreasing for waiters (because, the reality is, a good waiter makes more money via tips than with a $15 per hour wage).