A recent survey reported that minimum wage hikes resulted in higher food prices for restaurants. In addition to this, employees received fewer hours in their shifts.
One hundred seventy-three restaurants, representing 4,000 locations, answered the survey by Harri, a workplace management software company. Harri surveyed their participants from February 28 to March 15 and focused on the effect of raising the minimum wage in restaurants.
Workers around the United States of America continues to fight for a higher wage to enable them to live with the increasing cost of living. Following this, states are already increasing their salaries with six states increasing theirs to $15. Moreover, Washington DC that has the highest current minimum wage and it’s set to raise it to $15 by 2020.
On the other hand, raising the federal minimum wage is a different story. In 2009, House Democrats filed a bill to increase the salary from $7.25 to $15, as well. However, with the state of the law, passing it seems impossible.
Proponents push to increase the minimum wage since it means reducing income equality and improves the economy. However, not all organizations are in favor of it. The National Restaurant Association sees that increasing salaries can affect small businesses and eliminates some jobs.
The survey reported that 83% of the restaurants increase their labor cost by at least 3% due to the minimum wage hike.
Twenty-three percent showed that they needed no changes in their business. However, 71% reworked their menu and raised their food and beverages prices to reduce labor costs.
Other restaurant operators reduced their employee hours with 64% opted to do it while 43% eliminated jobs.
According to the survey, 87% responded that they increase wages for an employee who earns more than the minimum salary. The situation is similar to companies outside the restaurant industry. For example, the Bank of America and Target increase their minimum wage to attract more employee and to retain workers to continue their job.
