They Don’t Even Care About Us (it’ll likely be my last Michael Jackson song title refernce)
Do I raise menu prices? Do I shave employee hours? Do I sell one of my cars? Have the kid start mowing more lawns? That’s the dilemma facing my restaurant owner client in the face of the July minimum wage increase from $6.55 to $7.25 per hour. Maybe he won’t get a lot of sympathy for dropping his take-home from the low six figures to notably under $100K because of the wage hike (he’s still north of the average annual salary of most Americans), but he faces a real problem to combat paying out about fifty-five thousand dollars more a year in labor costs. Change his standard of living, impact customer service, or pass the increase on to his customers? Decisions, decisions . . ..
Turns out the company who franchises him helped make that decision for him. While it is unclear if their actions were in direct response to the impending wage hike (the law was passed under George W Bush’s administration, so it’s been known about for some time), they slightly dropped portion sizes, effective shortly after the minimum wages increase took place. In all likelihood, not noticed by the lion’s share of customers who passed through the doors of his restaurants.
So who ultimately paid the price for the wage hike? Us. His customers. The company went to a tried-and-true method of bait-and-switch (how about that, two multiple-word hyphenations in the same sentence). Shave the serving size so the customer doesn’t notice. Happens with everything from Oreos to cereal to canned pineapple. And that, as I see it, is one of the many problems with trying to level the labor playing field with enforced wage hikes. Consumers and the general public pay for it.
