The minimum wage has been and always will be zero. As many states and locales that have passed ever-higher minimum wage hikes are learning to their sorrow, the cost of an employee must be less than the value added to the business by that employee, and minimum wage hikes can negate that added value.
Food service establishments are particularly vulnerable. My father-in-law ran cafeterias in several places for almost 60 years before finally retiring at age 80, and he has repeatedly maintained that not only are food service establishments the most failure-prone of small business models, but they also operate on small margins. Now, with the advent of the new year, the city of Seattle’s minimum wage law has gone into effect, and one small restauranteur has already closed her doors.
The owner of a popular waffle shop in West Seattle said she had no choice but to shut down her business after the city’s new minimum wage law went into effect on New Year’s Day — hiking hourly pay to $20.76.
Bebop Waffle Shop, which was founded by a former New York City resident more than a decade ago, closed its doors for good on Monday.
“I’ve cried every day,” Corina Luckenbach, the waffle shop owner, told Fox 13 TV.
What’s heartbreaking about this is the way it hits small, independent businesses – like the Bebop Waffle Shop. The big chains have resources; they can adopt technologies, like self-ordering kiosks and burger-bots to attenuate the fiscal damage done by mandated minimum wage hikes. Small businesses cannot, and while it’s tempting to point out that the people of Seattle voted for this city government and likely will continue to support blue-city policies, this doesn’t help Corina Luckenbach’s former employees any.