Citing higher minimum wages, West Coast restaurant chain files for bankruptcy

[Achilles]

July 15, 2019

Citing higher minimum wages in Seattle, Portland and SF, West Coast restaurant chain files for bankruptcy

By Thomas Lifson


Progressives never learn. Even as Democrats running for president line up behind a national $15/hour minimum wage, on the West Coast, where cities like Seattle, Portland, and San Francisco all have implemented this demand, a restaurant chain with over 2000 employees has filed for bankruptcy, citing the high minimum wages that have increased its costs.

Jeremy Hill reports for Bloomberg: (hat tip: Legal Insurrection)

Progressive wage policies helped force upscale eatery operator Restaurants Unlimited Inc. into bankruptcy, according to court documents filed Sunday.

The company, which operates 35 restaurants ranging from fine dining to “polished casual” eateries, including Henry’s Tavern, Stanford’s and Kincaid’s, filed for Chapter 11 protection in Delaware on Sunday. Minimum wage hikes, two disappointing restaurant openings and consumers shunning casual dining are to blame for the bankruptcy filing, Chief Restructuring Officer David Bagley said in court papers.
The impact of minimum wage-driven higher labor costs was substantial.

Wage increases in Seattle, San Francisco and Portland boosted the company’s wage expenses by a total of $10.6 million through its fiscal year end 2019, Bagley said. Revenue for the year ended May 31 was $176 million, down 1% from the prior year.

Keep in mind that many workers who receive higher-than-minimum wages have contracts that specify that they will receive minimum wage + a certain number of dollars. So, it not mereley at the bottom that wages increase.

I am a partner in a restaurant that has adapted to the higher wage environment by using the service format that is gradually supplanting the waiter-system of taking orders and delivering them to tables. It is a hybrid of the fast-food model, of ordering and receiving food from a counter. Called “fine casual,” the system involves customer ordering at a counter and then receiving the food from a waiter or waitress. This saves both labor expense and time, allowing faster turnover.

So brace yourself for the gradual extinction – except in expense account-driven, high-end restaurants – of the ritual of sitting down and being greeted by a staffer saying something like, “Hi, I’m Sarah and I’ll be your waiter tonight.”
The effects of a national $15 minimum hourly wage will extend throughout the ecpnomy, sawing off the bottom rung of the ladder, where people learn skills, develop habits and gain confidence that can propel them to higher skills and higher wages.
Lefties will blame caitalism, of course.

They never learn:

Srikers demanding $15 in 2015 (photo credit: Fibonacci Blue)

Read more: https://www.americanthinker.com/blog...#ixzz5tkQVC9fO

[AWM]

Oh well, I'm more of a buffet guy anyway.

[Mugwump]

If your ability to make a profit depends on paying people starvation wages, your business doesn't deserve to survive.

[Hoppalong]

A starting wage OR learning wage was never meant to be a living wage Nor Should IT. If you can't make it, Then Move to another job that can support your fast living, multi cell phone, and smart TV's, and 2 to 3 cars that you just HAVE TO HAVE to keep up with the Jone's.

And besides THAT, many that work at these fast food places Should Not Even Receive the Minimum of today,,,, they are so incompetent and lazy~! They should as heck don't warrant 15 bucks an hour.`!

[Hoppalong]

in many areas the fast food industry is just making due. The economy is bad in these areas and they just can NOT operate if the wages go up to that dumb amount of 15. The Local Economy just can Not Support such raises and those places then will HAVE TO CLOSE. What is good in one area is NOT GOOD for ALL AREAS. That is the Huge problem of raise the minimum wages country wide. Leave it Up To The Business OR Company itself the Government Has No right To Tell What companies and businesses should pay their workers. Don't like it can't make it the MOVE to another job. I did~! And Am I Glad I did.

[Miradus]

They seem like they were in a mixed bracket. Too fancy for 'fast food', not fancy enough for high end wages.

I don't think one chain folding is indicative of an overall failure of the system.

Here in Hawaii, I pay $9 for a really good burger at a hole-in-the-wall place I know, or about $5 for a fast food burger (some are good, some are bad). That's about what I paid at Whataburger in Texas.

(I do miss Whataburger).

[Bear]

If your ability to make a profit depends on paying people starvation wages, your business doesn't deserve to survive.

Nobody is forced to work at a restaurant, car wash or any low wage job. Don’t you think young kids should have a chance to get a job while still living at home? Learn the work rules, develop skills, and move up? Why would you want to eliminate all entry level opportunities? Just to prove how woke you are?

[Miradus]

Nobody is forced to work at a restaurant, car wash or any low wage job.

Actually, many people are.

In rural areas with little in the way of high-end salary, you either work the low wage jobs that are available or you receive welfare.

The economic situations on the ground force people to either flee the rural places of their birth, or to go on the dole and accept the generational problems that brings. (Many of which they're just unaware of.)

I'm not arguing for a higher minimum wage. I'm just pointing out that most of today's rural population is forced to either travel long distances for work or to accept low wages and/or welfare. It was that way in my area in Texas, and it's that way here too on the Big Island.

Some people manage to start their own businesses and do okay, but anyone who has ever run their own business knows that you, as the owner, are in fact making low wages. The old joke about the definition of entrepreneur: a person who will work 80 hours a week to avoid working 40.

And there's just not enough niches for their own businesses to fulfill everyone's aspirations.

[Mugwump]

Nobody is forced to work at a restaurant, car wash or any low wage job. Don’t you think young kids should have a chance to get a job while still living at home? Learn the work rules, develop skills, and move up? Why would you want to eliminate all entry level opportunities? Just to prove how woke you are?

I think Miradus already pointed out the problem with the "nobody is forced to work for lousy wages" assertion. Sure they are. Otherwise nobody would do so and the employers would have to pay more. Really, that's not hard to figure out.

If you think minimum wage jobs are only for kids, or only intended for kids, this is similarly delusional, as is the idea that working summers at McDonald's somehow prepares you for working life as an adult or is a stepping stone to greater things or looks great on your resume. It's not true at all. A depressing number of adults, and even retired people, still have to work in low-level "menial" positions for minimum wage. You're always going to have people who clean the toilets, and those people deserve to be paid a living wage.

If you think that a low minimum wage is what's required for employers to hire kids with no experience, then you might consider that in the olden days some states used the same logic to establish a "youth minimum wage" that was significantly less than the minimum wage for adults. The upshot was that employers would simply let their adult minimum wage workers go and hire only kids. So states got a little smarter about it, and now some states have a system whereby you can hire kids under 18 for a very low minimum wage, but you can only pay them that for the first 90 days. of their employment.

For folks like yourself who have a problem with the obvious, low minimum wages work to the advantage of the business owners, never to the advantage of the workers, no matter how much you would like to believe it's otherwise.

[Mugwump]

A starting wage OR learning wage was never meant to be a living wage Nor Should IT. If you can't make it, Then Move to another job that can support your fast living, multi cell phone, and smart TV's, and 2 to 3 cars that you just HAVE TO HAVE to keep up with the Jone's.

Nice rant, but as a matter of practical reality, not too many people who have multiple cell phones and smart TVs and several vehicles have to worry about working for minimum wage.

And besides THAT, many that work at these fast food places Should Not Even Receive the Minimum of today,,,, they are so incompetent and lazy~! They should as heck don't warrant 15 bucks an hour.`!

Maybe they figure they aren't paid enough to do a good job or give good service or show up on time or any of the other things that are associated with a "good employee." Or maybe those who are competent and not lazy found better jobs elsewhere. It's always weird to me how many people who in other situations are glad to accept the idea that "you get what you pay for" are totally unwilling to apply that same concept to the quality of service or work they get from people who are paid very poorly. Why should it be different for labor than for any other commodity that you buy?