Home Bankruptacy Restaurant Chain Announces Bankruptcy, Says Minimum Wage Hikes to Blame

Restaurant Chain Announces Bankruptcy, Says Minimum Wage Hikes to Blame

by Stacey Santos

Restaurants Unlimited, a Seattle-based totally chain with eating place places in 47 US towns, announced on Sunday it became in search of Chapter 11 safety, bringing up “revolutionary” wage legal guidelines. The business enterprise, which has operated for the reason that Lyndon Johnson Administration, stated growing labor charges—part of a country-wide trend of government-mandated minimal increases—have been a part of its decision.

Restaurant Chain Announces Bankruptcy, Says Minimum Wage Hikes to Blame 2

One Factor of Bankruptcy

“Over the beyond three years, the enterprise’s profitability has been notably impacted using modern wage laws along the Pacific coast which have improved the minimum salary,” Chief Restructuring Officer David Bagley stated in court docket filings, The Seattle Times reports. “As a huge business enterprise within the Seattle metro marketplace, as an example, the enterprise was one of the first inside the market to be compelled to institute salary hikes.”

The minimum wage was not the most effective aspect Restaurants Unlimited blamed for their imminent bankruptcy. The enterprise also noted a couple of soft eating place openings and a decline in casual dining. The assertion, however, mirrors labor traits on the east and west coasts. BLS facts show that New York City experienced its sharpest decline in eating place jobs since Sept. 11, following its $15 minimum salary law.

In California, a neighborhood newspaper recently exacts how a whole business district sincerely disappeared following the town’s aggressive minimum salary push. Restaurants Unlimited’s declaration got here an afternoon before the Congressional Budget Office released a document estimating that a House invoice designed to raise the federal minimum salary to $15 an hour might value 1.3 million jobs.

Popular, But Economically Destructive

Polls display that minimum wage legal guidelines are popular with the American public. Still, evidence shows they adversely impact the maximum inclined in society and had been at the beginning designed to hold women and minorities out of hard work markets. Minimum salary laws are much less popular with economists, who say they devise a surplus of unskilled exertions and may definitely give employers an unfair bargaining gain.

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