To see the effects of the minimum wage hike, follow the pho

To see the effects of the minimum wage hike, follow the pho by Thanh Tan of the Seattle Times.

"Editorial writer Thanh Tan explores the connection between Seattle's new minimum wage and Vietnamese noodle soup. There are things people will pay a lot for; Pho is not one of them.

If you want to gauge the impact of Seattle’s new $15 minimum wage in the coming months, follow the pho.

Hundreds of restaurants throughout the area now serve Vietnam’s most popular comfort food.

For less than $10, the average pho connoisseur can slurp on rice noodles soaked in some mama’s supersecret beef broth. I like my pho with rare steak, tripe, meatballs, basil and fresh-squeezed lime — no bean sprouts. As the meat cooks in piping hot soup, I add a wallop of sweet hoisin sauce. Spicy Sriracha sauce is a must.

Pho is best experienced fresh, in a dining room that’s synonymous with the small immigrant-run family business. That means an auntie cooks, and the server or dishwasher is often the owner’s kid or nephew.

Like any other business, these mom-and-pop shops are contending with an initial wage adjustment per employee, from $9.47 an hour to $11 an hour as of last week. Businesses with 500 or fewer workers must pay either $11 an hour or $10 an hour with an additional $1 made up by tips or payment toward an employee’s medical benefits.

Some restaurants might respond by adding service fees and increasing menu prices. Ivar’s recently announced plans to end tipping and pay all employees $15 an hour. 

A seafood mainstay can do that. Pho is different. It exists to be large, tasty and cheap. 

Quynh-Vy Pham’s family owns four Pho Bac restaurants in the city. Her parents opened the original shop at the corner of South Jackson Street and Rainier Avenue South in 1982.

Pham says they will hold on to current prices — $7.75 for a small bowl, according to the restaurant’s website — as long as possible. Like so many others pho proprietors, their restaurant is not designed to be an Ethan Stowell or Tom Douglas establishment where customers expect to pay premium prices. 

“It’s hard for people to pay $15 for a ‘to pho,’ ” Pham says, referring to the Vietnamese translation of a bowl of soup. “The culture of Vietnamese restaurants means we have to be price aggressive.”

Pham says they are considering scaling down employment, possibly ending sit-down service and transitioning to a “fast-casual” concept to cut down on labor costs.

Mayor Ed Murray says employees of the city’s Office of Labor Standards will work “vigorously” with businesses on implementation and outreach, “particularly to minority communities.”

They’d better. As Murray’s Income Inequality Advisory Committee formed the new rules last year, it largely ignored the concerns of an ethnic coalition of business owners.

Taylor Hoang, owner of five Pho Cyclo Cafe restaurants, says the coalition requested a training wage or an exemption for microbusinesses with fewer than 10 employees. 

They got nothing. 

Anxiety is widespread, Hoang says, because the city is still releasing and translating information for non-English-speaking communities. For her, increasing the price on a product like pho is harder than it seems.

“Pho is not categorized as fine dining. People who eat this type of food have a certain expectation in their mind, so they are very price sensitive,” she warns. “ If they have to pay more than $10 plus gratuity and tax, it’s no longer an affordable luxury for customers who are used to eating with us a few times a week.”

To reduce expenses, Hoang is considering making their meatballs in-house using machinery rather than the handcrafted meatballs they commission from a local producer. Same goes for the tofu and hand-sliced rare steak. 

“There are different ways we can cut our costs. At the same time, that’s going to trickle down to supporting businesses,” she says.

Murray says it will take some time to understand the effects of the city’s new floor wage, which remains far below the estimated living wage of $21 an hour in Seattle.

“By moving to $11, the folks who are serving [customers] and washing dishes have a little better chance of feeding their families and keeping a roof over their head,” he reasons.

True, but think about that bowl of pho. It can’t make itself. What happens if it can get to the customer for a fraction of current costs and with fewer people in the kitchen? 

Is that efficiency or an unintended consequence of Seattle’s $15 experiment?

Follow the pho and find out."