Local 11-Backed Wage Hike Hurts Local Businesses
Unite Here Local 11 has been one of the most vocal backers of a $15 minimum wage. A few years ago, after countless protests and rallies, the union finally got its wish. By next Summer, cities in Southern California, including Santa Monica and Los Angeles, will reach $15 an hour.
But as wages creep up, it’s become apparent that the union-backed policy has some unintended consequences. At least a dozen local restaurants have closed in recent years, and others have cut back hours for staff or eliminated staff positions. One Santa Monica restaurant manager recently said, “There’s a dollar sign over people’s heads now…how much are you costing us to be here?”
Another restaurant owner in town listed the rising minimum wage among the reasons for so many restaurant closures: “The common thread seemed to be the minimum wage, the high cost, the high rents, the taxes.” His own weekend sales are down 30 percent.
Employment data for full-service restaurants in Los Angeles County backs up these observations. Between 2012 and 2014, the county’s restaurant industry averaged six percent annual employment growth. As the state minimum wage began rising, this figure ticked down under four percent. But as Los Angeles’ minimum wage ramped up, growth came to a standstill; in 2018, the most recent year for which data is available, it fell below one percent.
That translates to thousands of jobs eliminated or never created.
Local 11 seems unfazed. Despite the difficult fallout from a rising minimum wage, the union continues not only to back the policy; it’s added a $25 minimum wage to the top of its list of demands. But if this is what $15 looks like in Santa Monica, what would $25 mean for local businesses, especially restaurants that are already struggling to stay afloat?
It’s an important question, but one Local 11 doesn’t seem likely to ask any time soon; the union isn’t known for putting the best interests of the community over its own. Maybe next time a union-backed policy makes its way to local officials, they’ll have learned to second guess its merits.