real stories of the employers who struggle to survive with significantly higher labor costs from minimum wage hikes (and who sometimes fail and go out of business)

From Mark Perry.

"1. Abbot’s Cellar in San Francisco. One of San Francisco’s most-buzzed-about new Mission restaurants closed its doors at the end of January, citing the then-impending minimum-wage hike on May 1 as its death knell.

 

2. Anonymous San Francisco Apparel Manufacturer. This family-run business that contracts to make clothing for a company in San Francisco had to slash its staff after Oakland’s minimum wage increased. It used to be the owner and her husband, plus five to six other workers; now it’s 1-2 additional staff members.

3. Boca Nova in Oakland. The restaurant’s servers will no longer receive tips. “A note on the menu reads: ‘In lieu of gratuity, a 16% Lift Up Oakland Surcharge and 4% Service Charge will be added to your check beginning March 1st, 2015.’ The 4% goes directly to servers. The 16% covers the cost of raising other staff salaries.”

The Contra Costa Times reports that this policy change represents a pay cut: Servers made between $38 and $70 an hour with tips before the change; now they’ll earn between $22 and $28 an hour. The Times said that “about 60% of the restaurant’s wait staff, concerned their income would drop, decided to quit because of the policy…”

4. Boot and Shoe Service in Oakland. The owner raised prices by 16% at his three restaurants in Oakland, following the city’s 36% minimum wage hike to $12.25 per hour in March.

5. Booth Memorial Child Development Center in Oakland. If the Salvation Army can’t scrounge up money to cover the 36% wage hike by writing grants and finding donors, it might have to cut some of its 63 child care slots.

6. Borderland Books in San Francisco. The owner was set to close his bookstore this year, in the wake of San Francisco’s plan to hike the city’s minimum wage to $15. But Borderlands Books is getting a lifeline from nearly 500 customers who have purchased $100 annual membership subscriptions — one that will keep it open for at least another year. If customers with a membership purchase one book per month, they would pay an additional fee of more than $8 for each book.

7. Comix Experience in San Francisco. The bookstore “will soon have to generate an additional $80,000 a year in sales just to meet the minimum wage rise. … In order to fully cover the shortfall, we need to sell 334 memberships at the yearly rate of $240.”

8. Icon Grill in Seattle. Following the minimum wage increase, all employees at the restaurant will now only get one week of paid vacation. Some employees who’ve worked at the restaurant for more than a decade will lose three weeks of vacation.

9. Chinatown in Oakland. Four restaurants and six grocery stores in and around Chinatown have already shuttered since January, at least partly for fear that the wage increase was going to put them over budget. Among them is Legendary Palace, one of two banquet restaurants in the neighborhood.

10. Reaching Beyond Care in Oakland. Child-care assistant Eunice Medina, 23, was thrilled when Oakland’s 36% increase in the minimum wage took effect in March. But almost as quickly, Medina’s workdays were cut and her hours shaved from eight to six. Her employer, Asiya Jabbaar, says she had no choice. Despite slicing hours and laying off one of three assistants, Jabbaar says she still may need to close her business next year and convert it to a part-time after-school program. Her experience illustrates what can happen to small employers when minimum wages jump suddenly.

11. Sterling’s Family Childcare in Oakland. The owner, Muriel Sterling, significantly reduced hours for her employees in response to the wage increase– they were coming in at 7:30 am, and now they come in at 10 or 11. She’s also planning rate increases for some families, and she’s had to eliminate a “free rides” service she provided to members of the community.

12. Z Pizza in Seattle. In August, Z Pizza is closing, putting 12 employees out of work. Owner Ritu Shah Burnham doesn’t want to go out of business, but says she can’t afford the city’s mandated wage hikes. “I’ve let one person go since April 1, I’ve cut hours since April 1, I’ve taken them myself because I don’t pay myself,” she says. “I’ve also raised my prices a little bit, there’s no other way to do it.”

Small businesses in the city have up to six more years to phase in the new $15 an hour minimum wage. But Shah Burnham says even though she only has one store with 12 employees, she’s considered part of the Z Pizza franchise — a large business. So she has to give raises within the next two years."