A November ballot measure put up by San Francisco’s Board of Supervisors to raise the minimum wage to $15 an hour has restaurant owners in the city determined that they will have to raise their prices as a result. Some estimates range from $7 for a bottle of beer and $9 for a cup of soup.
The ballot also approved legislation that would amend the city’s universal health care law so employers will not be able to reclaim money targeted for their employees’ health care if the funds went unspent.
Restaurant owners are furious. Ben Bleiman, the owner of Bullitt, Tonic, Wild Hare, and other bars in the city, said, “It really feels like the city is coming after us. It doesn’t seem fair to me that we are being asked to bear this burden.” Bar owners have formed the San Francisco Bar Owners Alliance, which boasts 110 members, and has joined the Golden Gate Restaurant association to request a tip credit to be part of a minimum wage compromise, but the city refused.
Bleiman explained that waiters and bartenders who are tipped and make the city’s minimum wage already between $30-$40 an hour, even without the proposed hike in the minimum wage, which is $10.74. He added that his kitchen workers are already making $15 an hour but are not tipped, and if the minimum wage rises, he will have less to pay the kitchen workers. Bleiman concluded, “It’s a fairness issue.”
California does not allow tip credits, but San Francisco was within its rights to create a minimum-wage proposal where tipped employees would not receive a higher minimum wage, but the city was not interested. Mayor Ed Lee admitted that a tip credit was never considered. He said, “There would be a lot of people who would have a hard time dealing with it because of the way restaurants calculate tips – whether it’s shared or not shared, who gets it and who doesn’t. It would have been a very complicated issue to have to deal with.”
Restaurant and bar owners estimate the two changes on the ballot will force their profit margins of 3% to 5% to plummet into the red. Gwyneth Borden, head of the Golden Gate Restaurant Association, said the new measures, combined with the soaring prices of renting commercial space and the higher prices for food because of the state’s drought, will force restaurants to start closing. She asserted that there will be higher prices for consumers, surcharges that could rise from 4% to 15% and fewer staffers at the restaurants. She offered, “You’ll see more and more migration to Oakland and the South Bay and the Peninsula, where costs are cheaper and labor’s cheaper.”
Supervisor David Campos, the leader of the fight for the ballot measure, called the ideas on the ballot “very modest proposals,” accusing the Golden Gate Restaurant Association of “saying the sky is falling for years.” He said, “They gave it their best shot at the board, and not a single supervisor agreed with them. They have cried wolf before, and they’re not very believable.”