CASHMERE - A report by King 5 put things into perspective about how this year’s minimum wage increase is eating away at profits.
‘59er Diner owner Joe Canatta owns two restaurants that share the same name in Leavenworth and Cashmere.
Canatta told King 5 that he expects to lose $40,000 this year with the increased minimum wage. Canatta says he’s already raised menu prices twice over the course of three years to compensate for the wage increase.
“If it’s $15 for a hamburger, on their way home, people are not gonna stop at the diner because it’s just too expensive,” Canatta told King 5.
Washington’s minimum wage increased to $13.50 an hour on Jan. 1
Canatta told King 5 that he supports a raising the state’s minimum wage, but believes there’s a better alternative.
Canatta proposes applying a concept known as “tip credit.”
According to Gusto.com, a business blog, a tip credit is:
Paying tipped employees less than the minimum wage as long as tips bring their earnings up to the minimum wage threshold. If an employee doesn’t make enough in tips to reach it, then the employer has to pay the difference.
A “tip credit” is not a legal employer practice in Washington state.
Canatta says computer kiosks seen at restaurants like Applebee’s, Chili’s and Olive Garden are a growing trend in the industry and will soon take away jobs on a much larger scale.
"Those computers on the tables at every Applebee's. They're not there for looks. They're there to replace people's jobs. I'd much rather walk in and greet Flo and give Flo a hug. You can't hug a computer,” Canatta told King 5.
In 2021, Washington’s minimum wage will reach its targeted minimum wage threshold of $15 per hour.