Thursday, November 02, 2006

Restaurants and the minimum wage

Voters in Montana, Arizona, Colorado, Missouri, Nevada, and Ohio are voting on whether the minimum wage will be increased for their state. Restaurant owners are worried that they will be hurt the most from a higher minimum wage. If the minimum wage is increased the restaurants will have to make up for the money lost. The restaurants may raise their prices which would most likely decrease the number of customers. Some restaurants would reduce the number of workers. A study done at Ohio State University found that about 60 percent of restaurants fail after three to five years. If the minimum wage is increased, the failure rate of restaurants could become even higher because many will have higher prices.

6 comments:

Greg Delemeester said...

I agree with Drew. I suspect restaurants and other entry level service jobs will feel the brunt of the higher minimum wage before anybody else.

There is another issue here though that I wonder what you all think about. Is it wise to put legislation like the proposed increase in the minimum wage on the ballot for voters to decide? Do you think voters have enough information to make educated decisions?

sam20walz said...

Restaurants would definitly be affected by a minimum wage increase very fast. Yes, companies could cut workers to save money and yes they could raise prices. This is a problem for resaurants though. Cutting workers could lead to inefficient service. This would lead consumers away just as higher prices would.

sam20walz said...

Restaurants would definitly be affected by a minimum wage increase very fast. Yes, companies could cut workers to save money and yes they could raise prices. This is a problem for resaurants though. Cutting workers could lead to inefficient service. This would lead consumers away just as higher prices would.

amunching15 said...

Dr. Delemeester made a great point that I never thought about until it was mentioned. I would think that minimum wage should be put on ballots. Everything else is put on them. Maybe people will think even harder when it comes down to something like this that will affect a person more personally. A negative that would come from this is the automatic impulse to say yes it should be increased. Many people would automatically say yes just because it sounds like the right thing to do. Personally I would say yes it should be increased but I have thought about the subject and feel its the best thing.

On the subject of the restaurants being affected, I think they would be. The cutting of workers would be a good thing though to everyone that isnt being cut. The workers that are just working to make money and have no skills are the ones that would be cut. The overall quantity outputs of restaurants would increase.

Keith Zeigler said...

I'm commenting on the article now after the minimum wage increase bill on the ballot for the state of Ohio has PASSED. I voted against the issue of raising the minimum wage. While it will be nice for those workers who will benefit from the increased minimum wage, will it outweigh the loss of people who are unable to find jobs because companies are unable to keep a full work force? While I'm not completely against the idea of an increase in the price of minimum wage, I believe that raising the state's minimum by 33% to $6.85 is too steep. Time will only tell us if the voters of Ohio have made a wise decision or not.

mike flanagan said...

I do believe that minimum wage should be raised but not that much. I feel that restaurants will get hurt from the raised minimum wage. Employees who work in sit down restaurants are not just receiving a pay check but they are earning tips as well. This is why I think that minimum wage should only be raised a little. $6.85 may be a little too excessive and restaurants will have to fire employees because they are not making the money they should, in turn are not able to pay all the employees along with making a good profit.