Restaurant industry watches minimum wage battle in Seattle

The restaurant industry is watching with interest a late push by waiters and bartenders in Seattle to drum up support against a proposed $15-per-hour minimum wage law in the state.

The group fears a minimum wage law hike will significantly lower the level of tips servers receive from customers.

The big picture: The potential for minimum wage increases - either on a federal level or state by state - has been a hot topic in dissecting restaurant stocks. Some analysts see a significant bottom line pinch as companies have a difficult time passing on the extra costs to consumers in the form of higher prices.


From other sites
Comments (11)
  • bobsar
    , contributor
    Comments (402) | Send Message
    I doubt it would effect tipping at all. And I'm not so sure about profit reductions in fast food. Has it been proven that fast food price increases would be resisted? I'm in a state with 10% meal tax. On a $10 ff lunch. How much would prices have to increase?
    A lot of fries sold in an hour so, price increases may not be so significant.
    28 Apr 2014, 03:14 PM Reply Like
  • DrGarnicus
    , contributor
    Comments (118) | Send Message
    10% meal tax? Is this on all restaurants or fast-food spots? What state is this?
    28 Apr 2014, 03:38 PM Reply Like
  • bobsar
    , contributor
    Comments (402) | Send Message
    Actually 9% meals 10% alcohol Vermont
    29 Apr 2014, 10:30 AM Reply Like
  • edhaven
    , contributor
    Comments (109) | Send Message
    The minimum wage for tipped servers in Florida is $4.91. They rely on tips for their income. Based on a $15 hourly wage, I have no doubt that tips would be
    lowered significantly or not added to the bill at all.
    28 Apr 2014, 03:41 PM Reply Like
  • Craig418
    , contributor
    Comments (143) | Send Message
    Does "drum up support against" mean the same thing as "drum up opposition to", or is there some subtlety here that I'm missing? It just seems like an odd way to phrase it.


    Making servers share their tips with the rest of the staff (as suggested in the article) would be a major deviation from long-established practice. I think there would be a lot of resistance to that.
    28 Apr 2014, 03:45 PM Reply Like
  • mathari
    , contributor
    Comments (276) | Send Message
    There will be no pinch at all because smart business will always run at its leanest where there is an equal playing field (everyone has to pay the minimum wage). By leaving minimum wage at levels where it is no longer a living wage, we are subsidizing employment (i.e. WMT can pay 8 dollars an hour because the government gives SNAP, EIC, or Section 8), causing unproductive deficits, deflation, and stagnation of the economy. Government has the responsibility to ensure output is humming along with infrastructure and innovation spending.



    Wealth of the working class is the driver of economic growth. There is no free lunch and if we tie wages to productivity, we see that the minimum wage has not kept up with productivity. Instead, we are subsidizing low wages, a prescription for disaster. Government spending on non-productive welfare is at an all time high and about 50% of the nation does not pay any federal income tax (aside from entitlements or national social insurance payments which any working person pays).



    Stocks go up when people have money to spend because demand side spending creates increased revenues, profits, competition, mergers and acquisitions, etc. Right now, companies are obviously still all achieving profits, but at smaller levels, which is suffocating growth and eliminating good competition. JCP is on life support and most retail is losing money. Look at earnings this quarter among most retailers and you will notice the pattern.


    Markets move along as long as GDP keeps up. If the 80% controlled 60% of wealth instead of 13% of the wealth, we could easily reach 200% of GDP without speculators and hedgers crashing the market. The market depends on GDP and our inability to use good government spending like infrastructure and innovation to fuel GDP seizes the engine of capitalism.



    Increasing minimum wage to be a living wage will place about 30% of the country back on the tax rolls, reduce welfare which is non productive government spending, and permit us to spend on infrastructure and innovation without having to create massive deficits and runaway inflation.
    28 Apr 2014, 04:29 PM Reply Like
  • BobbyLang
    , contributor
    Comments (2) | Send Message
    I think if they increase the minimun wage to 15.00 an hour then they should prohibit restaurants from imposing mandatory tips on the bill.
    28 Apr 2014, 04:35 PM Reply Like
  • phxcrane
    , contributor
    Comments (763) | Send Message
    I doubt that they will impose a country wide fifteen dollar min wage. But I can tell you the only tip i will leave is to tell the server not to keep voting these idiots in.
    28 Apr 2014, 05:59 PM Reply Like
  • bobsar
    , contributor
    Comments (402) | Send Message
    If wait staff get $15 an hour they'll be standing around hoping for non busy days. It will be like Europe. Take lunch break at noon. Ever eat at a government run cafeteria? Crater Lake NP, we called it the Soviet Cafeteria.
    29 Apr 2014, 10:35 AM Reply Like
  • Stock Market Mike
    , contributor
    Comments (3731) | Send Message
    You can't directly compare different societies like that. It's never been customary to tip in many European nations, but it is over here. Tip amounts will likely go down, but if you still tip, you still get superior service. Many will still tip because it is customary to do so.


    If you want a better parallel, look at Canada. High minimum wages - many places firmly enforce splitting between all employees - and yet over half of us still tip, and we do generally get good service just like patrons in the US.


    If a restaurant's service slides, complain - the waiter will smarten up or get fired, indicating the restaurant took corrective actions - or the restaurant does nothing and slowly slides to bankruptcy on negative reviews. Whatever the outcome, you'll be getting superior service from somewhere.


    Hey, do any of you tip before the meal? I usually tip a small amount beforehand to encourage good service, then the remainder afterwards assuming there isn't a forced tip on the bill (hate those!), and assuming the food/service lived up to expectations. I probably tip the remainder a little under 40% of the time. It would be higher if not for forced tips.
    29 Apr 2014, 02:16 PM Reply Like
  • bobsar
    , contributor
    Comments (402) | Send Message
    Unless you are a regular customer and the staff know you tipping gets you nothing. In medium priced places the wait staff just takes the order and brings the food. That's it.
    30 Apr 2014, 10:17 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs