Urban Dynamics Blog

Restaurants respond to minimum wage increase, customers not pleased

By Matt Johnson

In my previous two blogs, I reported that 12 states increased their minimum wage on January 1st; and I reported San Diego restaurants responded to a city mandated minimum wage increase from $10.50 to $11.50 with a 3 percent surcharge. Now I would like to report that restaurant goers are not pleased.

As one diner unhappily exclaimed at Sammy’s Woodfired Pizza & Grill in San Diego,

I was surprised to see that charge. I didn’t know what it was…I think it’s pretty  unfair. It’s not good…Why would they charge us the fee for increasing the minimum wage?

This consumer went on to state that businesses should just sell more and increase spending in advertising and marketing instead of adding the surcharge or passing on the additional business expense to the citizenry who approved the increase in business expense. Yes. That just happened.
I guess policy makers and voters didn’t expect businesses to respond to the minimum wage policy in the way they did. As I said before, and I’ll say it again, when economic policy is applied to the market place, the market – firms and agents – will respond and not necessarily in the way policy makers and voters think.

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But yet, some consumers did expect restaurants to just sit there and take it. Apparently, restaurants should have been thinking about the plight of diners, because as another restaurant goer mentioned,

I don’t think this is right. I mean, the cost of living is already expensive enough as it is.

Yes! The cost of living in San Diego is expensive. This means a person is probably going to spend more for the basics than someone else in another city that is less expensive to live in. But certainly a consumer’s budget is not the responsibility of a restaurant owner, right? Shouldn’t the consumer consider his own purchasing power and what kind of economic policies will either help or hurt him?

This blog mentioned previously that San Diego restaurants responded initially to the minimum wage legislation by trimming expenses and cutting back employee hours; they also thought about increasing food prices; but ultimately they settled on the surcharge. So clearly, how restaurants in San Diego have been responding to this minimum wage hike is not a secret. How business owners are thinking about these issues is in print for everyone to see.

And now that this is public information, shouldn’t consumers be responsible for understanding how economic policy will affect their utility? And should customers really be surprised if businesses respond to economic policies in their own best interests?

Finally, how will this new minimum wage policy affect different parts of San Diego? That is, how will this new minimum wage policy affect those parts of the city that are suffering from urban decay, where the non-white population is generally higher? And how will this new minimum wage policy affect those parts of the city that are experiencing urban success?


Matt Johnson is a writer for The Systems Scientist and the Urban Dynamics blog; and is a mathematical scientist. He has also contributed to the Iowa State Daily and Our Black News.

You can connect with him directly in the comments section, and follow him on Twitter or on Facebook

You can also follow The Systems Scientist on Twitter or Facebook as well. 

Photo credit: Travel and Leisure

Photo explanation: Blue Boheme Restaurant in San Diego






Copyright ©2016 – The Systems Scientist


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