Minimum Wage Hike Forces LA Restaurants to Change Operations

Restaurant Closed Sign

Los Angeles’ recent minimum wage increase went into effect as of 2015 and will continue to rise to $13.25 an hour up to 2017.  According to research by the Pew Research Center, nearly 44% of the minimum wage workers across the country are in the food preparation and service industries.  Yet while Los Angeles’ wage increase seems likely to benefit the multitudes of restaurant workers currently working for minimum wage, for restaurants the effects are not as beneficial.

For restaurants and other small businesses that are particularly sensitive to minimum wage hikes, these increases have forced businesses to reevaluate their operations.  While mass layoffs is not an option as service would be affected, restaurants have begun resorting to other measures to combat the effect of the minimum wage hikes such as shortening their opening hours, foregoing the staffing of hostesses in the mornings, and eliminating nonessential positions such as sous-chefs and assistant managers. 

For some restaurants, their choice of ingredients has also been affected by these hikes, with many now favoring lesser expensive cuts of steak and considering switching from fresh to frozen seafood.  And for an unfortunate few, the minimum wage hike has caused them to permanently close their doors.

With Los Angeles City Council members proposing further wage increases by 2019, these cost saving measures will likely only increase.  How will the continued minimum wage hikes affect other Los Angeles restaurants?  Read More