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Not deterred by California’s efforts to completely destroy the state’s economy by increasing the minimum wage to unrealistic levels, Washington's King County Council just increased the minimum wage in the county to $20.29. Reports from California show significant price increases and businesses either leaving the state or closing up completely, all directly attributable to the increase in minimum wage. Despite this, King County has pushed ahead with an even larger increase and the results will likely match California’s.
The profit margin on food is 3-4% in many restaurants, including fast food. When a state or municipal government forces an increase in the minimum wage, the restaurant has to either raise prices or reduce costs (primarily labor) to maintain a profitable business. Less jobs, less hours and higher prices.
By raising the minimum wage, in the short term, workers will see an increase in wages, but long-term costs will increase negating the additional money received from the higher minimum wage.
Sometimes, instead of a salary bump, many workers instead find their work hours cut or their jobs eliminated completely. For some employees, if they fall below a minimum hour threshold required for benefits, they lose benefits too.
In the case of Rubio’s Coastal Grill, 48 restaurants are closing as a result of the $20 minimum wage in California.
King County Council should look to our neighbors to the south and heed the economic problems pursuing a higher minimum wage creates and consider reversing course before it’s too late. In the meantime, other counties and cities will benefit from King County's shortsightedness and will welcome businesses that can’t afford to do business in King County anymore.