The idea of a national $9-per-hour minimum wage has spurred debate in the restaurant industry among workers trying to make a living and operators worried that higher labor costs could put more pressure on profit. Many chains are staying mum on the subject, as Nation’s Restaurant News reported, while one analyst is predicting which ones would feel the biggest pinch.
In general, chains with most of their units in higher-wage labor markets are likely to feel less pain from an increase in minimum wage than those concentrated largely in lower-wage states, says Sharon Zackfia of William Blair. “We estimate the overall unit-level labor pressure resulting from a minimum-wage hike could range from as high as roughly 21 percent for Sonic to as low as 14 percent for BJ’s [Restaurants], assuming a $9 federal minimum wage,” she wrote in a research note.
Both sides of the debate can look at past increases to shore up their arguments. For other rules that affect restaurants, the likely outcome isn’t as clear, especially when enforcement seems to illustrate impractical aspects.
A noodle by any other name
Sometimes, regulations that make perfect sense in theory have a way of playing out much differently in practice. Take the case of Quebec, where officials tasked with enforcing a law that makes French the first language have taken issue with restaurant menus touting “pasta,” “calamari” and other dishes with non-French monikers, National Public Radio reported.
The government later acknowledged that employees might have acted with an “excess of zeal” in ordering Buonanotte to change the name of dishes, but publicity has driven other restaurants to tell similar stories, including one that was ordered to cover up the words “on” and “off” next to a hot-water switch and another required to change “steak” to “bistec” on a menu board.
When cocktail cops go too far
In the U.S., Utah is known for uber-strict rules about liquor licenses, keeping restaurant bars out of sight and other restrictions on alcohol sales, but a recent flap has lawmakers clarifying rules in favor of cocktail fans.
Last year, the state Department of Alcoholic Beverage Control began cracking down on eateries that serve cocktails before patrons order food, spurring the House to approve a bill this week to stipulate that it’s legal for customers to order a cocktail as long as they’re looking at a menu with the intention of ordering food, The Salt Lake Tribune reported.
While they were talking cocktails, lawmakers decided to consider other measures, including bills to free up liquor licenses and to remove a requirement that eateries keep the bar and booze hidden, The Associated Press reported.
Has your restaurant felt the pain of unintended consequences from well-intentioned rules? Tell us in the comments.