Higher wages a surprising success for Seattle restaurant

Menu prices are up 21 percent and you don't have to tip at Ivar's Salmon House on Seattle's Lake Union after the restaurant decided to institute the city's $15-an-hour minimum wage two years ahead of schedule.

It is staff, not diners, who feel the real difference, with wages as much as 60 percent higher than before. One waitress is saving for accounting classes and finding it easier to take weekend vacations, while another server is using the added pay to cover increased rent.

Seattle's law, adopted last year after a strong push from labor and grassroots activists, bumped the city's minimum wage to $11 beginning April 1, above Washington state's highest-in-the-nation $9.47. Scheduled increases that depend on business size and benefits will bring the minimum to $15 within four years for large businesses and seven years for smaller ones.

As Washington, D.C., and other cities consider following Seattle, San Francisco and Los Angeles in phasing in a $15-an-hour minimum wage, Ivar's approach, adopted in April, offers lessons in how some businesses might adapt. Ivar's Seafood Restaurants President Bob Donegan decided to raise prices, tell customers that they don't need to tip, and parcel the added revenue among the hourly staff.

For some of the restaurant's lesser paid workers - including bussers and dishwashers - that's meant as much as 60 percent more. Revenue has soared, supportive customers are leaving additional tips even though they don't need to, and servers and bartenders are on pace to increase their annual pay by thousands, with wages for a few of the best compensated approaching $80,000 a year.

Link: http://www.cnbc.com/2015/07/31/higher-wages-a-surprising-success-for-seattle-restaurant.html

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

steveschneider wrote:

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

You could probably earn that in Miami, either waiting on tables or bar tending. I have known some bar tenders here in NYC that rake it in.

They hate it though, it seems like a brutal life style.

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

DWags wrote:

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

My wife's cousin makes near that at a restaurant in Phoenix. He's happy as hell.

CheesySpartan wrote:

InTenSity wrote:For 80k a year, I'd go back to waiting tables.

Keep in mind, you would most likely have to work 70-80 hours/week to make that.

Robert J Sakimano wrote:here's the problem though - we can't have service workers thinking they're as good as the rest of us. Next thing you know, they'll be wanting to move in next door to us and stuff like that.

Robert J Sakimano wrote:here's the problem though - we can't have service workers thinking they're as good as the rest of us. Next thing you know, they'll be wanting to move in next door to us and stuff like that.

InTenSity wrote:

Robert J Sakimano wrote:here's the problem though - we can't have service workers thinking they're as good as the rest of us. Next thing you know, they'll be wanting to move in next door to us and stuff like that.

Don't worry, when I was waiting tables, I did a lot of drugs and lived in rat infested apartments.

InTenSity wrote:

CheesySpartan wrote:

Keep in mind, you would most likely have to work 70-80 hours/week to make that.

I'd say closer to 50-60 hours. Honestly, it depends on where you work. If you can hit $2000 in sales, you should walk away with about $350-$400 in cash x 5 days a week is $1750/wk x 52 puts you near $91k. You figure about 10-15% of that is cash, so you claim around $80k on your taxes. That's pretty aggressive, but doable. The tough thing would be no paid vacations, very little healthcare and almost no benefits. Stress levels are high, but if its guaranteed, I'd go back.

CheesySpartan wrote:

InTenSity wrote:
I'd say closer to 50-60 hours. Honestly, it depends on where you work. If you can hit $2000 in sales, you should walk away with about $350-$400 in cash x 5 days a week is $1750/wk x 52 puts you near $91k. You figure about 10-15% of that is cash, so you claim around $80k on your taxes. That's pretty aggressive, but doable. The tough thing would be no paid vacations, very little healthcare and almost no benefits. Stress levels are high, but if its guaranteed, I'd go back.

You are assuming people will still tip 10-15% on top of paying 20% more for the same product all while the business suggests you don't have to tip? Not sure that will happen.

NigelUno wrote:How is it successful for the restaurant?

Menu prices are up 21%. Revenue is up 20%.

I don't think the article said how much expenses were up (other than saying that some wages were up as much as 60%). Seems like you would have to factor that in?

The Pantry wrote:Expect service to eventually deteriorate if higher wages and prices become the norm.

And, think of poor Giant Moose when he enters a restaurant with high prices and gets a server that is either male and/or over 40. He won't have any way to stiff them : (

Motown Spartan wrote:Also, now that some companies are being forced to pay $15 minimum, they are cutting health care, retirement plans, etc. Unintended consequences.

Motown Spartan wrote:This is the beginning of unprecedented inflation in our economy.