POLL: New Minimum Wage Laws Hit Restaurants


Higher minimum wages are forcing restaurants to make difficult decisions. As of January 1, 18 states and 20 cities nationwide raised their minimum wages. Texas is not among the states to raise the minimum wage, but the consequences of the trend are being felt at restaurants here and around the country. Red Robin recently announced it is eliminating busboy positions at hundreds of its locations, while Wendy's last year announced the addition of kiosks to replace human cashiers.

The new minimum wage laws are only the latest strain on the restaurant business. "Labor and food costs, insurance issues, and things like that have made it even more difficult in an industry that commonly works on very slim margins to begin with," says Jonathan Horowitz, CEO of Legacy Restaurants and president of the Greater Houston Restaurant Association. He tells KTRH that customers will feel the impact. "A lot of the additional costs that restaurants have sustained over the past few years have been passed on in some way to the consumer."

While raising prices is always an option to offset higher costs, it can only go so far. "If the consumer, at some point, feels the prices are too high, they'll go elsewhere," says Horowitz. "So it's often a very difficult balancing act on the part of the restaurant, to be able to survive economically without having to continually increase menu prices."


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