If you’re a leftist in San Francisco or Oakland, California (highly likely), you probably cheered as the city implemented a minimum wage hike last summer raising the wage to $13 an hour, soon to be $14 an hour this July 1, and $15 an hour on July 1, 2018.
On the other hand, if you were a restaurant owner, you probably felt your heart sink when the decision was announced, as it seemed highly likely that you could be run out of business by the hike.
You would have been right.
In the winter of 2016-17, 64 restaurants around the Bay Area have closed. And these weren’t your garden-variety restaurants that were parts of national chains; they closed all over the area, from Berkeley to Hayes Valley to Oakland to the Embarcadero to Inner Richmond to the Marina to the financial district.
But that possibility didn’t matter to the groups fighting for a wage hike, including “Fight for 15,” which stated, “We’re robbed on the job by our employers looking to cut corners. And it’s not like our employers are struggling — these are multi-billion dollar corporations.”
In April, the Harvard Business School, released a study that examined restaurants in the San Francisco Bay Area between 2008 and 2016 titled, “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study posited that a $1 increase in the minimum wage led to a roughly 14% increase in the likelihood of a median 3.5 star restaurant closing. The study concluded that over the next two years, San Francisco’s restaurant industry would shrink, meaning the workers would lose jobs.
Shhh. Don’t tell that to the restaurant workers. Let them find out for themselves.