Seattle Restaurant Chain Files for Bankruptcy Due to Minimum Wage Hike

The lobbyists for MW-15 continue to be deluded that they are not killing jobs

As the evidence mounts on how destructive the call for minimum wage hikes across the country have been the denial of the economic reality also mounts. Time and again wherever the policy has been instituted there have been strikingly adverse effects. And still the far left proponents only continue with their talking points, made void by the cold facts of the results.


The latest comes from the casual dining chain Restaurants Unlimited Inc. which has just filed for bankruptcy proceedings. Corporate officers in the filing have stated that the primary reason for the chain’s struggles rests primarily with it grappling with new minimum wage laws. The correlation is not deniable.

The restaurant brands operated by RU are primarily in the Seattle area, where the minimum wage hike was long ago established. Other locations exist in the liberal strongholds along the Pacific coast, including San Francisco, another MW-15 enclave. The salary requirements have been a drain, since employment costs are always the highest expense for eateries.

In the court papers the company’s Chief Restructuring Officer, David Bagley, cited a number of influences on the corporate revenue stream, with the mandated wage hikes being the biggest strain on the company.

“Over the past three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage,” Bagley said. “As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes.”


Over the past fiscal year the company had a slight downturn in revenue, dipping -1% for FY ending this May. In that time the company saw its wage obligations explode, to over $10 million over that same year. This is the type of fiscal reality that eateries face, and which the wage proponents callously pretend are endurable for companies.

A common refrain heard from those lobbying groups, when told that these wage hike are untenable, has often been, “Well if they cannot afford to pay a living wage they should not be in business!” Think of the vacancy of that mindset; not only do they encourage insolvency and the commensurate loss of jobs, this also defies their primary talking points.

A favorite argument from this troupe is that merely raising food prices slightly will easily provide their desired wages. Instead, as seen by the RU bottom line, their revenues have already been impacted in trying to compensate for the added burden and they have been saddled with even steeper costs. As a result now — when attempting to improve the income for workers — this new policy has over 2,000 employees facing the threat of their entire income.

This follows suit however with what has already been witnessed. Seattle watched a number of businesses close or leave the city after its wage laws were passed. In New York City, a study on restaurant jobs shows that after the minimum wage increase was made law the loss of restaurant positions was the highest experienced since the 9/11 tragedy.


Even the Congressional Budget Office has acknowledged the problem. In a recent report about a proposed national MW-15 bill, the CBO stated that if passed the law would lead to 1,300,000 jobs being lost. But, living wages, and all.

These realities continue to be ignored by the ardent activists, pretending that their policy has nothing but beneficial results. It would be nice to see these benefits, if they ever do come to fruition.



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