San Diego Restaurants Serve “Dining Surcharge” After Minimum Wage Hikes
Those who voted to approve the hike may want to chew on the realities of running a business.
Legal Insurrection has often chronicled the unintended consequences of minimum wage hikes across the country, from worker struggles in Seattle, automation replacing service personnel, the closing of a popular eatery in New York, and the loss of jobs at UC Berkeley.
Now, in my home town of San Diego, diners are being served-up a surprise along with their bills as a result of voters approving a minimum wage hike in last June: A dining surcharge.
Girding for the second minimum wage hike in six months and the fourth in 2-½ years, many of San Diego’s full-service restaurants are introducing for the first time an average surcharge of 3 percent of the meal’s cost to help cover increased labor expenses that some operators say amount to hundreds of thousands of dollars in a single year.
…Hoping to preserve what restaurateurs insist are already thin profit margins, owners say they’ve tried trimming expenses and cutting hours, as well as raising prices. They ultimately concluded that the dining public would better tolerate a charge at the end of the bill than continued price hikes on the menu.
“I can’t get to sleep at night wondering where in the heck am I going to get the dollars I need to pay all my employees,” said Rick DiRienzo, owner of Rockin’ Baja, which operates three restaurants in San Diego County, is about to open a fourth in Mira Mesa, and also has one in Newport Beach.
Some eateries plan to increase menu prices, and one study published by News 10 San Diego shows that when the state minimum wage phases up to $15/hour in 20121, the difference per month would make for a nice meal.
…The study says the average San Diegan spends about $254 a month eating out. When minimum wage hits $12 an hour, their bills will rise an extra $12 a month. When minimum wage reaches $15, they’ll be spending an extra $31.20 each month at restaurants to cover the increase in labor costs.
“It’s definitely pretty expensive, especially when we have to pay for rent already, and the extra taxes we pay in California; it’s ridiculous how high these prices are going up,” said San Diegan Moises Hernandez, who has cut back on eating out over the last two years.
That’s assuming that people chose to eat out at the same frequency in the same location. Experience indicates otherwise.
The minimum wage is impacting employer decisions for other industries as well. Houman Salem, the founder and CEO of ARGYLE Haus of Apparel in the Los Angeles area, is moving his business to Las Vegas and the wage hike is the sole reason.
…[I]f not for the $15 minimum wage, I’d have zero interest in leaving California. In some ways, it’s an ideal time to make clothing here. There’s a huge demand for American-made apparel, and the industry infrastructure that exists in Los Angeles — from garment makers to sewing machine repairmen — is difficult to find elsewhere. But businesses can’t operate at a loss.
…We need more stable, blue-collar jobs in places like the San Fernando Valley — the kind I thought I was helping create. California, however, has put up a giant “Go Away” sign.
Salem provides some food for thought. Too bad many Californians have no stomach for business realities.
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Comments
Well, as usual, the liberal elites don’t need to actually live with the consequences of their forced actions. It only applies to the little people.
Why would the coastal elite in Silicon Valley worry about a measly 3% to %5 increase in their restaurant bill, their company is paying for it anyways.
In the mean time someone(s), whom this little socialist move was designed to help, will be making $0/hr instead of $10/hr.
Thanks for nothing.
That’s fine by me. I would be happy to pay an extra 20% when I eat out to know that all the workers are being paid a living wage.
If you’re happy to pay 20%, why not 30%, or 40%, so the workers can live in a nicer place, perhaps take a vacation or get a new TV at your expense. For me, coughing out 20% more for everything means MY family has to eat less, and/or I have to work extra. How is this fair.
Someone else has said this better but here goes- If you have minimum skills, minimum education and perhaps minimum motivation, why the heck should you be paid more than the minimum wage?
“How is this fair. ”
I take it that you don’t believe in any kind of minimum wage or wealth redistribution as a matter of public policy?
“If you have minimum skills, minimum education and perhaps minimum motivation, why the heck should you be paid more than the minimum wage?”
Well what should the minimum wage actually be, if anything? I’m seriously asking you that question.
There should be no minimum wage. Wages should be determined by the free market.
BTW, it is one of my pet peeves when someone conflates ‘minimum wage’ and ‘living wage’. They are not the same thing. Minimum wage is paid to someone as an entry level wage. If you are making minimum wage you should not be raising a family. Also, no one is guaranteed a living wage. If you want to advance past minimum wage than learn a skill and develop it and make yourself valuable to society. You will be paid what you are worth.
There is a minimum wage….ZERO! Someone(s) will not get a job due to the higher cost of entry. The left understands that if you increase the cost of an addictive substance, you will still reduce demand (cigarettes) but never are able to apply the same lesson to a voluntary transaction (labor).
Oh, what a good little boy you are, signalling how much virtue and money you have. /headpat
“Oh, what a good little boy you are, signalling how much virtue and money you have”
Yes, you should see me in real life. I drive a Rolls Royce and carry a cane with a silver tip. I look just like Uncle Moneybags in Monopoly.
A pity you couldn’t have spent some of your vast wealth on an American built automobile. But then again you are a cartoon character.
That’s wonderful! You’re doing that now, right? I mean, nobody is stopping you.
Just don’t try to compel me to do what you think is so swell.
“That’s wonderful! You’re doing that now, right? I mean, nobody is stopping you.”
If there was an easy way to leave extra money and know it go towards making sure that all workers got at least $15 an hour, then of course I would do it.
“Just don’t try to compel me to do what you think is so swell.”
I take it you don’t believe there should be any minimum wage?
“If there was an easy way to leave extra money and know it go towards making sure that all workers got at least $15 an hour, then of course I would do it.”
You.. simply.. hand.. it.. to.. them.
I apologize if I typed too fast for you.
“You.. simply.. hand.. it.. to.. them. ”
Waiter, can you get the manager over here please? I would like to review the restaurant’s payroll records so I can figure out everyone’s hourly rate. Then I would like a list of people who are working here this shift. Finally, I will go in the back of the restaurant and personally hand money to each of those individuals in an amount I determine.
There.. you.. go.., now.. you’re.. getting.. it.
Sabril -“I take it you don’t believe there should be any minimum wage?”
Sabril – Most everyoneh here believes we should have a minimum wage – We just prefer a minimum wage that actually provides a benefit instead of creating harm.
What is the precise amount of a minimum wage which creates maximum benefit while causing no harm?
“What is the precise amount of a minimum wage which creates maximum benefit while causing no harm?”
It’s less than $15 / hr. At that wage, McDonalds et al have already started to replace the human workers with kiosks to do the job. Only libs defend a minimum wage that gets people fired and eliminates jobs.
Why stop with your dining bill? Would you pay 20+% more on your retail payments so the clerks receive a living wage? What about your transportation bills? Your fuel bills?
Instead of demanding a living wage, workers must instead avoid living above their means. If you can’t raise a family of five as a single parent waiting tables at Denny’s, then the rest of us owe you no obligation to bridge the gap. Improve your skills and increase your worth.
“I would be happy to pay an extra 20% when I eat out to know that all the workers are being paid a living wage.”
So you’ve been tipping 40% of the bill (the usual 20% tip plus the “extra 20%” that you’re “happy to pay” in order to boost the servers’ income closer to a “living wage”) every time you’ve eaten out for the past several decades, right?
…Right?
The federal poverty line is $23,500 a year. For someone at the poverty line in the US, how would they compare to the rest of the world? Would they be toward the bottom? Around the middle 50%?
Top 3%. Yes, that’s right. Our “poverty line” places that person in the richest 3% of the world. All the railing against the evil 1%’ers? Well, our poor aren’t far off. That’s because we have the smallest government of any functional country in the world. The vast majority of the globe has things like government-mandated wages and they are poor because of it.
Our janitors live better than everyone else’s kings.
New York’s governor Cuomo, always interested in giving away ‘free stuff’ at the taxpayers expense, has gotten a $15 minimum wage and tossed in 3 months of ‘paid’ maternity leave, using executive order of course.
He started by handing out the pork to the bloated State workforce, then the powerless fast food industry, now, to every business in the state.
He had to promise to phase it in differently in each part of the state (perhaps depending on how many vocal conservatives live in certain counties), and businesses with 10 or fewer employees pay $.50 less. He’s gushingly told workers the maternity leave is going to be paid for by a ‘nominal’ tax on all workers wages.
So, it’s just a matter of time until we see robots at Burger King and less staff everywhere else. Not surprisingly, Cuomo is shouting himself hoarse trying to tell us all what a great idea this is. Bah!!
I’ll just take it out of the tip.
I feel sorry for pizza delivery guys. Say the bill was $22.10.
You pay him a $25.00 and tell him to keep the change. ( Ok it’s been a while. ) Now the price is $22.40. What do you do? You give him $25.00 dollars and tell him to keep the change.
Net result? The restaurant gets more money, but the driver gets a smaller tip. The restaurant doesn’t geet more money from you they effectively cut the drivers salary.
C’mon now, when was the last time the Monied ClassesTM anywhere worried about the cost of dining out??? It gives them that ‘Warm, glowing feeling of Doing Good for the menial workers”TM Of course, we all should be happy the Monied Classes are willing to pay the working college kids (drowning in excessive debt), the working-3-jobs to feed a family father or the single mother with multiple kids a mere pittance.
After all, the Monied Classes are entitled.
If fewer plebes dine out, that’ll be all the less human refuse for them to tolerate.
The labor theory of value – proven wrong every time it’s tried.
The Labor Theory of Value is even worse than this: you can’t just sell your labor for fee simple. It’s like a weird DRM where the laborer can keep coming back to capture profits long after his job is done.
This is what happens when people who have never, ever worked at a blue-collar job for a single day in their lives make the laws.
Mr. DiRienzo, when the lease is up on your San Diego restaurants, close them and pour your money into your non-San Diego county restaurants.
Leslie, I am surprised you are not all over the new Philly sugary beverage tax enacted on Jan 1st. It is the first in the nation. It’s an unbelievable intrusion into everyday life.
California keeps me plenty busy with its crazy…but I will see what I can do with an upcoming post.
Trust me…I feel your pain.
Many – if not most – Californians seem to have no stomach for reality at all.
Well, when the LSD passes through the stomach it takes reality with it.
…The study says the average San Diegan spends about $254 a month eating out. When minimum wage hits $12 an hour, their bills will rise an extra $12 a month. When minimum wage reaches $15, they’ll be spending an extra $31.20 each month at restaurants to cover the increase in labor costs.
What a clanger! This is where the noise would start on the Gong Show.
Typical consumers don’t stick to their eating habits no matter what the cost. They tend to limit the cost and adjust their prandial excursions to fit … mainly because their household budgets can’t absorb arbitrary price increases. So, the same customers spend the same amount—that is, revenues are unchanged—but costs have increased, because vendors have to pay more for the same labor. This means that no price increase, whether marked on the menu or added as a surcharge at the end, can compensate for the increase in costs. And profits take a pounding.
In other words, The Dismal Science strikes again.
Standard Lib trick: Impose higher costs on employers to satisfy a voting bloc knowing that said employers will merely pass the added cost on to their customers. And best of all, when the customers get angry they’ll blame the employer company, not the government that imposed the problem in the first place. Added bonus: government gets $$$ via higher taxable incomes and higher sales tax.
Damn. That’s roughly how much the wife and I spend on sit-down restaurants in an entire year.
“Why stop with your dining bill? Would you pay 20+% more on your retail payments so the clerks receive a living wage? What about your transportation bills? Your fuel bills?”
I would not object to that, but it would need to be coupled with stricter limits on immigration.
“If you can’t raise a family of five as a single parent waiting tables at Denny’s, then the rest of us owe you no obligation to bridge the gap.”
Perhaps not, but I don’t think minimum wage laws are justifiable as some sort of moral obligation.
I think the surcharge may not apply if you order to go.
Wait a minute!
I thought all those California liberals ate soylent!
https://www.soylent.com/
Waiter in Chinese restaurant to Richard Pryor…You order soylent , you eat soylent!.
Actually, this adding a surcharge at the end of the bill is brilliant. As Harry Hawkins above stated, if the restaurant just raised prices THEY would be blamed but if the surcharge is added at the bottom then the customers can see EXACTLY why their meals have increased in price. Let the government take the blame for a change.
HENRY.
https://youtu.be/EOg0d5Wq4i0
I knew that was coming, knew it before I clicked, knew it even though there’s no hint in the URL, lol.
Ever notice that the government thinks that individuals should pay outragous college tuition to learn worthless job skills (liberal arts degrees)
While at the same time, the private sector should pay extra to teach useable job skills.
Instead of minimum wage issues, we should focus on maximum wage issues. The max wage for economics profs and social studies profs should be set low enough to dissuade them from teaching and force them to get a job at a higher wages at McDonalds. That would help make America great again, and our students would be better educated.
Government wage controls. Yes. Great idea. For a liberal.
My point exactly!
Good to have you back. Hope you had a great Christmas.
VG
The only point you have is just north of your forehead.
I’m sure a ripost that brilliant taxed both your brain cells to the limit.
“sabril | January 6, 2017 at 4:25 pm
What is the precise amount of a minimum wage which creates maximum benefit while causing no harm?”
How about where the supply curve and the demand curve intersect.