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Saturday, August 22, 2015

Seattle Area Restaurants Face Higher Wages

Fox News ran an interesting article, written by Dan Springer, a month ago on their website in the Politics section:

Seattle sees fallout from $15 minimum wage, as other cities follow suit by Dan Springer

The article focused on the impact of a higher minimum wage - $15 per hour.

In his article, Mr. Springer delved into the actions taken by restaurants:

"Some restaurants have tacked on a 15 percent surcharge to cover the higher wages. And some managers are no longer encouraging customers to tip, leading to a redistribution of income. Workers in the back of the kitchen, such as dishwashers and cooks, are getting paid more, but servers who rely on tips are seeing a pay cut.

Some long-time Seattle restaurants have closed altogether, though none of the owners publicly blamed the minimum wage law."

With regard to the issue of long-time Seattle restaurants closing altogether, there is a tick upward in closings reported by in the new Restaurant Investor Report.

In general, Seattle has a vibrant restaurant industry.  The report is very interesting with regard to independently owned full service restaurants, including regional chain concepts.

As of June 30, 2015, the report showed the 6 month closing rate for long-time (over 3 years in business) full service restaurants increased by 46% from 2.7% in the second half of 2014 to a 3.9% rate in the first half of 2015.

A solid 93.4% of full service restaurants owned by sole proprietors and regional chains remained in business.

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