Seattle’s upcoming minimum wage hike — which will see employees making at least $20 an hour — has come under fire by the restaurant industry.
Restaurant owners have warned that this wage increase could hurt their businesses. However, it could also destroy the industry as a whole in Seattle.
Seattle’s Minimum Wage Law
Seattle’s minimum wage law, which first went into effect in 2015, originally was a $15 minimum wage deal.
Back in 2015, this was a big deal for many workers, as a $15 minimum wage was long fought for. However, this law is also tied to inflation. As inflation goes up, so do minimum wage hikes.
Inflation Raises Minimum Wage to $20
Now, 2024’s inflation numbers have led Seattle’s latest minimum wage hike to reach nearly $20 an hour.
This fall, Seattle’s Office of Labor Standards will officially announce what the minimum wage hike will be in 2025 — but many restaurant owners are already concerned.
Minimum Wage in 2024
According to Seattle’s current minimum wage numbers in 2024, employees must earn at least $19.97 an hour.
However, employers who have less than 500 employees may only pay workers $17.25. This difference may also be made up by certain factors, such as medical benefits or tips.
A $3 Increase?
Analysts have so far suggested that Seattle could see as much as a $3 increase in minimum wage for 2025.
However, officials haven’t yet come out to clarify exactly what this wage hike will be — though it will be at least $20 an hour.
Helping Workers During Inflation
This law was designed to ensure that workers’ wages increase alongside inflation. Wage inequality is a huge issue within the restaurant and food industry, and this wage hike could continue to help many workers.
As cost of living prices continue to skyrocket, restaurant workers are relying on seeing this wage hike — even if their employers are warning it could be detrimental to their businesses.
Why Restaurants Will Be Hurt
Analysts have pointed out that the restaurant industry in Seattle will be harder hit by this minimum wage increase than any other industry.
There aren’t a lot of restaurant groups doing business in the city that have fewer than 500 employees. Therefore, they’ll be forced to pay this higher wage hike, whereas other industries may not have to.
How This May Impact Restaurants
Industry experts have already explained that this higher wage could end up impacting restaurants in various ways.
In an effort to make up for this increased cost in wages, restaurants could end up seeing their operational costs skyrocket.
Looking at Profits
As this wage hike could end up hurting restaurants’ profits — or at least cutting them in some way — restaurants may seek to bring in more profits in other areas.
For example, restaurants could end up cutting jobs, which could help them make up for revenue losses. Reduced operations could also help bring in more profits.
Menu Prices May Rise
Seattle has already been known for being an expensive city. Consumers in the city have long become used to paying quite high menu prices when they want to go out to eat.
Now, these menu prices may only continue to rise if this expected wage increase is as high as the industry is predicting.
Customer Traffic May Fall
However, analysts have pointed out that consumers around the country have become frustrated with having to cough up a lot of money when they want to go out to eat.
As a result, many consumers have stopped eating out at expensive restaurants. If Seattle continues to raise menu prices, then consumers may simply stop going to these restaurants.
Service Charges
In recent years, more restaurants have implemented mandatory service charges or fees — and consumers are not happy about it, especially as some of them are considered “hidden” fees.
Restaurants in Seattle may choose to implement these charges, all in an effort to make up for the loss of profits if their employees receive a higher wage.
