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Averages are deceptive. 25% is on the low end.
"What Are the Ranges?
Certain fast food restaurants can achieve labor cost as low as 25 percent, while table service restaurants are more likely to see labor in the 30 percent to 40 percent range, depending on the menu and extensiveness of service. Food costs (including beverages) for the restaurant industry run typically from the 28 percent to 35 percent range, depending upon the style of restaurant and the mix of sales."
I have already noticed that the price of even a modest meal in local restaurants in NYC has risen. Can’t go to a restaurant for a shish kebab with vegetables over rice, or a grilled chicken sandwich, or a Chinese meal without spending nearly-to-over $20. So I rarely eat out. Good thing I like to cook! Today’s cooking will include turkey Salisbury steak with mushroom gravy, homemade whole wheat challah, spinach/mushroom quiche, and mashed potatoes with braised onions. It’s so much cheaper to cook it at home.
As wage goes up, tips go down...................
For every 1% rise in menu prices, some number of potential customers are going to decide to not eat out.
The effect will be particularly felt in late night shifts, where there is not that much business, but menu prices do not change.
At the point where revenue on late night shift does not pay for labor costs, they will just eliminate that shift and fire those people.
no... its the fact what it will do to the balance of the labor market. Skilled trades are $5 more out of Apprenticeship. Why the hell should a kid who cant even get a simple order right at the drive thru make more than skilled workers? Minimum wage is a staring point in the labor force. It is not meant to live on indefinitely. Its meant to be graduated from in the traditional way. and that is start, learn the job, and get advanced in salary based on skill level. I personally hope it fails!! No One Owes anyone more money. More money is earned.
Assuming your numbers are correct, which I doubt, you imagine this in a static world. The workers at other food suppliers now also get $15. So does everyone in the supply chain that is minimum wage. The Union people, often have contracts that include wages relative to the minimum so everything they touch goes up too. Everything gets more expensive and it leads to more increases than the simple numbers you throw around.
I skip these middle men and cook from scratch at home. No gas wasted driving to a restaurant. No wasted time to dress and waiting around at the place from a seat to a glass of water to the meal to the check. No money wasted on their overhead and required tip. I’d rather curl up on the couch in my bathrobe and enjoy a quiet meal at my leisure without screaming kids running around or worried it’s going to be held up by thugs or wondering about who knows who’s turd world germy hands have touched it or stored it inappropriately.
Back in the day when I worked for a conglomerate that owned restaurants the spreadsheets reflected labor cost as 50% of operating expenses—not sure if that is still true but 25% sounds a bit low.