After voters in San Francisco approved an initiative last week to boost the
city's minimum wage to $8.50, small businesses in the city are saying that they
may have to make cuts in other areas to offset the increase, the San
Francisco Chronicle reports.
The city's new minimum wage covers almost all employers, including small businesses.
The newspaper notes that restaurant owners say that the increase will be extra
burdensome for restaurants because they'll have to pay waiters the new minimum
wage of $8.50 in addition to tips.
"It's forced us to give an increase to people like waiters who least need
it," says Doug Biederbeck, owner of Bix restaurant. "It will definitely
require us to reconsider health benefits, and it will definitely require us
to consider higher prices."
Other restaurant owners say they may have to reduce staff or scale back the wages of nontipped
staff to the new minimum wage to make up the difference, the newspaper reports.
The newspaper notes that one study from a economics professor at the University
of California, Berkeley, found that 13.6 percent of businesses with 100 employees
or fewer would experience an increase in operating costs greater than 5 percent.
Proponents of the increase say it will benefit thousands of low-wage workers
who work in one of the most expensive cities in which to live in the country.