Bay Area Restaurants are Struggling with Rising Minimum Wages

Wednesday, September 4, 2019, 3:14 pm
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The consequences of the UC Berkeley labor teams’ flawed studies are once again being felt by small businesses throughout the bay area.

Before cities in the Bay Area debated whether or not to raise their minimum wages — they relied on studies by the University of California Berkeley’s labor team to deliver results that city officials wanted to hear: Minimum wage hikes would only be beneficial to the city.

And thus, studies produced by the Labor Team at UC Berkeley all claimed that raising wages would have a modest impact on operating costs for business and would be offset by gains for minimum wage earners in the area. Interestingly, all studies showed little-to-no negative effects due to wage hikes.

However, the real-world consequences of these policies are much different than the results anticipated by local officials.

A recent article in Restaurant Dive highlights how restauranteurs in the bay area are being forced to reimagine their business models — or close as a result of drastically rising labor costs.

For Greek restaurant Souvla and bistro RT Rotisserie, this meant having customers assume many of the roles that servers once held, including bussing tables and submitting their orders on self-serving kiosks. Others have implemented a service charge in order to cover the rising labor costs, but customers are usually still expected to tip on top of the added charge.

If restaurants can’t adapt, their alternative is to shut their doors completely; which was the unfortunate fate for Two Sisters Bar & Books.

These consequences playing out in real-time show just how biased and one-sided the Berkeley Labor team studies really are. A new website called BiasedBerkeley.com exposes the labor center for what it truly is: Organized labor posing as a non-partisan think tank.

Before local and state governments consider enacting wage hikes, they should consult more neutral researchers that don’t have a hidden agenda.