One restaurant owner in Los Angeles stated that he was preparing for signing a new lease on ONE of his TWO restaurants.
He won’t be able to sign that lease now, and he is looking closely at shutting down BOTH operations, and he says the rise in minimum wage is the reason.
I suspect he will move completely out of Los Angeles, and find a location where he can use his skills.
The cost isn’t just the base raise-—you have to factor in matching Soc Sec==6.2%—matching Medicare==1.45% and then there is Workmen’s Comp Insurance. . All of that can add up to more than 35% on top of the base wage.
The last time I did bookkeeping for a roofing company in LA, their workmen’s comp rate was 105%-——For every $100.00 paid to the employee, the cost of the premium for workmen’s comp was $105.00.
Now you might understand why it costs so much to get a new roof on your house.
Sorry, but the employer is already paying those percentages on top of the actual wage, so if the minimum wage goes up 15%, his total cost of labor goes up 15%.
You are right, of course, that almost nobody realizes how much workers comp can affect cost of labor for some industries.