Former West Hollywood City Council member Steve Martin took to Wehoville recently to decry what he calls the "feel good panacea" of a minimum wage raise, arguing that many businesses — particularly restaurants — will be forced to shutter as a result of the hike.
Citing the perilously thin margins of any restaurant (5% to 7%, by his estimation), Martin says that a raise to $15 an hour for bussers and dishwashers with no relief for tipped employees will either lead to massive shifts in the restaurant scene — towards higher-end dining options at extreme and a slew of fast-casual — or outright closures.
That could be particularly true for places like coffee and yogurt shops, he argues, where ownership would either be forced to take on shifts themselves to defray costs or significantly raise the price of their product, at the risk of becoming uncompetitive.
Arguing that he "generally [doesn’t] have a problem with wealth distribution," Martin says that it’s simply easier to spend someone else’s money than your own, as most constituents within West Hollywood’s borders are not small business owners themselves and thus would not be as easily affected by the minimum wage raise. He further predicts a possible future for the city wherein smaller operators simply can’t compete, leading to the Orange County-fication of the neighborhood, full of national chain box stores.
Of course, Martin’s point could likely end up being moot in the face of what is apparently a backroom deal between lawmakers and labor unions in the state of California to raise the minimum wage to $15 an hour by the year 2022. That would mandate the wage level statewide (and would offer no decrease for tipped employees), which in one sense could put much of the crux of Martin’s argument to bed. With nowhere for business owners to hide from the minimum wage increase (say, in other neighboring municipalities) except out of state, West Hollywood could be in the same boat, for better or worse, as every other city in the state.