Tom’s Letter on Proposed $15/hour Minimum Wage Increase

An Introduction to Tom’s Letter:

Most of you have heard about the Seattle movement to raise the minimum wage to $15/hour. While we all want to see more money put into the hands of those who are at the bottom of the wage scale, we also feel that there hasn’t been enough public discussion given to issues such as whether benefits are to be considered part of wages and, of special importance to the restaurant industry, whether tips are to be considered part of wages. If the answer to both these questions is no, what are the economic consequences to businesses and in particular to our restaurant business model?  This is a complicated issue and one that we think is not well served by slogans. Our company’s own recent back-of-house wage increase initiative has vaulted us to the forefront of this debate. Tom would like to clarify his thoughts on the proposed $15/ hour minimum wage increase as a way of starting a discussion on how this increase, if it is passed by the City Council or voted in on the ballot, will affect all of us and our economic futures. Here is Tom’s letter:

$15 NOW is a catchy easy to understand slogan. Where we stand on it is the question of the day and has been every day for months on end.  This is a very important issue and is not going to be swept under the carpet.  So let’s explore it from the restaurateurs’ perspective, mine in particular.

I have been at the forefront of this issue, in the medias eyes, because of our back of the house (BOH) initiative last August.  I felt, and continue to feel that the kitchen side of our business is undervalued economically as a profession.  While health care has always been a priority at our restaurants, too many of our BOH crew have to choose between their doctor and their rent.  Restaurant kitchens are a traditional landing zone for people who have chosen culinary careers, skilled craftsmen and women, gaining valuable experience for future endeavors.  The newest immigrants to America often fill positions in the BOH while they learn a new language and acquire new job skills.  On average our dish team earns $12 per hour, prep cooks $13 and cook’s $15+.  BOH also receives a small tip out from the FOH in the neighborhood of $50-$75 a month.  Up to 9 days of Paid Sick and Safe Leave was mandated by City council decree and implemented in 2013 for all staff members.

The front of the house (FOH) crew typically consists of highly trained hospitality veterans.  Many have honed their craft over a decade and deliver graciousness and deliciousness every day.  Waiters, bussers, hosts and bartenders all receive gratuities as part of their wages.  These “tips” are considered wages by the IRS and the State of Washington.  We pay the typical payroll taxes on these tips and are responsible for the federal taxes if a tipped staff member doesn’t declare and pay their appropriate tax share. In fact they ARE the wages of our industry.  When you include the current minimum wage of $9.32 most FOH staff members make in excess of $20 per hour with a high of $40 to $50 depending on their  shift.  FOH wage earners also receive the benefit of CPI on menu pricing because tips are based on the menu price.  There is always the possibility that a shift might be “called off” for business volume reasons which would equal zero pay.

This does not mean that the tipped employee is getting filthy rich either.  I don’t begrudge the FOH its traditional wage structure, but we need to realize that the $15NOW movement was born in the fast food industry model and not tipped dining.

There is much to be gained or lost when the Mayor’s task force and City Council’s task force arrive at their recommendations.  Even more important is having leadership with a back bone to decipher the suggestions and fight for what is right.

Let’s look at our current business model.

…We run on average a 5% profit business before taxes and reinvestment.

…We offer full health care benefits to anyone willing to take on the responsibility of management and subsidize at 50% of the medical insurance premiums for anyone else on our team who would like health care, requiring only that they average 25 hours a week worked.  We subsidize 75% for those staying with us more than seven years.  

… We offer vacation benefits of 1 week after 1 year, 2 weeks after 2 years and 3 weeks after 5 years  and 4 weeks after 10 years to every full time staff member who works 40 hours per week and proratedvacation pay to part time staff who work  25+ hours per week annually.  

… We offer  up to 9 paid sickleave days to every full time staff member and corresponding leave to part time staff.  

…We offer 50% off dining in any of our restaurants to staff and a guest. 

…We offer 16,000 free staff meals every month during all shifts worked.  

…We keep a staff emergency fund for those times that a team member requires more cash than what’s on hand.  

…We pay for uniforms when they are required.  

…We do not charge staff credit card fees on tips.

…We even have free espresso:)

The $15NOW  group would like to see a $15 minimum across all job classifications and immediate implementation.

I would like to see the minimum wage increase (who decreed that it has to be $15?) phased in over 5 years for non tipped staff.  I would like to see the  FOH continue at minimum wage + consumer price index raises each year. There should be implementation across all businesses uniformly regardless of size and structure.

Our numbers suggest that if $15 NOW has its way without any consideration for tip enhanced wages, fine dining restaurant prices would immediately jump 20%.   That is a $5 million+ direct price hike annually on our menus and consequently to our customers.  That is more than double our bottom line before taxes and reinvestment.  In other words there is no way for us to absorb this expense in-house. This also does not reflect price increases we are likely to receive from our farmers, dry goods vendors and beverage distributors.  This price increase is hugely inflationary to the restaurant business and is irresponsible when considering  business people who have long-term leases and investments based on prior economic models.

Maybe there are too many restaurants and this will be a natural way to cull out the weakest among them.  I do have some concern that we would have to shutter some of our, but if that’s what the voters want then so be it. They are the ones who will be asked to foot the bill.  This is going to touch everybody soon, so I suggest you do your own math and see where it might affect your life.  Can or will your employer still afford health care?  Staff meals? Everything you buy from local produce to rent to childcare to your own meals out on the town will be affected.  We do know that the City Council and Mayor’s office will still make their wage and enjoy their health and retirement benefits without fail.

I would be lying to say that I’m not concerned with the outcome of this national experiment happening in the Seattle market.  It is also not lost on me that our City Council and Mayor’s office have very little small business experience.  While they have budgets to live by, they are not playing with their own cash.  Parking meter fees, B&O tax dollars, excise “sales” taxes and fees collected from tourist and business travelers and the rest of us are chess pieces to be moved on a board, but the cost of failure is ours, the tax payers. Raises and benefits given to city workers are from our tax pockets.  They might get voted out of office for their actions and decrees, but they won’t go bankrupt. It is inherently easier to spend other people’s money than the gut check of investing your last dime into a dream.

I have put our money where our mouth is in trying to offer a more livable wage to our non-tipped staff.  Seattle currently has the highest “waiter wage” in the country.  We have already had to raise menu prices to cover our BOH wage initiative even though I was determined to absorb its cost within our current bottom line.  What is a reasonable profit for us to make?  If you think for a second that “Tom Douglas Restaurants” are “too big to fail” you are sadly mistaken.

 I am frustrated that the Walmarts and McDonalds of the world have not stepped up to offer more livable wages and health care for their employees and record huge profits all the while. They should be ashamed of their business models.  They rely on food banks to feed their crews and hospital emergency rooms to provide their health services all on the backs of responsible employers and citizens.  I prefer compassionate capitalism over “highest best use” and ” maximized profits”.  These reckless ME ME ME terms inevitably lead to the destruction of the relationship and trust between ownership and staff.

We as a company have worked hard to keep Seattle a viable downtown and a more livable city.  My fellow restaurateurs, hoteliers and I have stepped up to every charitable cause and have been compassionate, active neighbors.  When business from outside of our city decides whether to pick our town for their convention or business meeting, they look at the economics for their attendees.  When tourists pick a destination, it often reflects the “deal” they are able to get.   As a board member of Visit Seattle, I know we are one of the most expensive locations in the country already.  Thirty to forty percent of our business, depending on the season, relies on travelers’ spending.

When a local has to choose where to dine, they are now faced with a 520 bridge toll, increased parking rates and hours, future tunnel tolls, terrible traffic jams and now a possible 20%+ menu inflation.  It’s not hard to imagine them choosing to stay at home.  In fact, many already have because of another trend….on line shopping.  We began to feel the effects of this trend in 2013 and don’t see it stopping anytime soon. When the modern American shopping center was born right here at Northgate Mall and proliferated to suburbs around the nation, many downtown cores were decimated. In a recent chat with a downtown department store owner, there is serious concern that in-store foot traffic will decrease by 50% between 2010 and 2020.  That is what their models are showing with the extrapolation for us being if you’re not coming downtown to shop you’re  probably not going downtown for dinner either.

It is clear to me that this is a direct tax on restaurants like we were some sort of vice like tobacco or marijuana.  It is also a thinly veiled tax grab for the city.  First the lusty new parking rates and now 20 to 25 percent more sales taxes on increased menu pricing.  Shel Silverstein wrote an elegant morality tale called “The Giving Tree” and I’m afraid our leaders have not read it recently. Seattle’s City Council and Mayor attribute their election to the support of organized labor while we as a community are being eaten alive, limb by limb.

Finally, a few thoughts about our “little” company that Jackie and I started in 1989.  We are now a collection of small businesses joined at the hip. There is a common core set of values and ideals.  We have survived a tortured yet blessed beginning  including the release of half of our staff after our first 3 months in business and the birth of baby Loretta 5 months after opening night.  Serious under-capitalization, three or four recessions and bubbles, September 11, and even robbery at gunpoint have not deterred us.  We have been embraced by Seattle and environs in a way we could never have imagined and for that we are extremely  grateful. We have chosen to be part of the livable downtown Seattle solution rather than migrating to safer ports.  This minimum wage issue could, depending on the outcome, be the most serious threat to our ability to compete so far.

We have gone from doing a little less than a million dollars in business our first year to over 50 in year 25. Our co-workers have blossomed from 20 to almost a thousand.   We have gone from being a few days from bankruptcy to having, at one point, 5 payrolls in the bank . We have averaged a 5% profit over our tenure, 1% better than the national average for fine dining restaurants…yahoo!  We treasure our co-workers and customers more than anything else.

As the chips fall in this process let’s ALL be thoughtful and learn ALL the facts about this worthwhile debate.  We concur with the idea that everyone deserves a fair wage for a hard day’s work.  In my opinion, $15NOW with no acknowledgement of total compensation is a hollow slogan meant for headlines and shout downs rather than thoughtful, meaningful conversation, and equitable solutions.  It makes no sense for Seattle to have a carved out exemption when the IRS and the State of Washington both concur that tips are earned income. That is what needs to be said.  

Tom Douglas

 

April 3rd, 2014

112 Responses to “Tom’s Letter on Proposed $15/hour Minimum Wage Increase”

  1. Les Gammill Says:

    Well said Tom! You have always been an eloquent, balanced and thoughtful leader. Congratulations on a well articulated statement.

  2. Linda Schantz Says:

    Well said..you are a responsible business owner and I hope the Seattle Mayor’s Office and City Council will listen to common sense approaches to the wage issue..

    A 15.00 minimum wage would put me out of business..

  3. Schuyler Ingle Says:

    Well spake, sir!
    S

  4. bigbeer Says:

    Great post, Tom. Really great points. Thanks for sharing.

  5. greg olsen Says:

    Well said, I represent the owners of all the bowling centers statewide. We’re on your side. Just let us know how our trade association can be of help. Most of our members also belong to WRA.

  6. Mike K. Says:

    Great read and points made. Couple thoughts-First, inflation will ruin the $15 wage in a matter of years. As you mentioned, restaurants will need to make up for the lost revenues and will be forced to raise prices. Not only does this effect those that would be potentially eating at these restaurants, but every wage earner in seattle. Cost of living starts at the bottom of the pyramid and once the middle class will want to keep their quality of life. If a meal costs X one year and the next is X(50%), they will require that much of a pay increase from their employer. If they don’t get that increase they will move to a new area in which they can keep the quality of life, harming city economics even more.

    Minimum wage positions, especially those in the fast food industry are NOT meant to support a family.

  7. Beth Says:

    Thank you for this well articulated position, and for having been such an important part of our community for so long. As a small business owner myself, I, too, hope that saner minds will prevail. I also want the lowest paid members of our community to have more in their pocket – to be paid a fair wage for fair work. But I also recognize the careful balance that must be achieved to ensure an end result that is equitable for all. Me? I’m looking to move my business out of Seattle. With almost 30% of my product cost being labor, there is no way my products can compete financially with those prepared by someone else just outside the City limits.

  8. tom w Says:

    Total compensation attempts to do nothing less than redefine the meaning of an hourly minimum wage. Employers could be allowed to deduct tips, health care, meals on the job, pensions, paid sick leave, bus passes, vacation time, and more from the minimum wage, which is not what happens now. If we allow total compensation into the new minimum wage, many workers who make less than $15 an hour could see no increase in their take-home pay at all.

  9. Leslie Irish Evans Says:

    Food for thought, Mr. Douglas. (Pun intended.) You offer a reasoned and balanced response.

  10. Nita Wyatt Says:

    I strongly disagree with a $15now min wage. A lot of small Restaurants and businesses will go out of business.

  11. Maureen E Cooke Says:

    I certainly agree with Tom on all the issues that he so brillaintly mentioned in his letter. We are a single independent restaurant and do feel the pinch of having to pay the employer portion of tips that are declared by our employees plus all the other benefits that we offer (free staff meal, free shift drink, L&I, Social Security employer portiosn, vacation pay, etc..)

    We could not sustain a $15.00 minimum wage in our little business & would most definitely have to close.

  12. Eva Wallace Says:

    You have stated the issues very well, especially for a city like Seattle that already has high level of living expenses and more to come, higher parking rates and the traffic issues. Retired people like us, love to dine out occasionally (2-4 times a month), can’t do it as often as we used to when we worked, but still love to; we tip generously for good service, but I can see that this will create a further hardship on people like us who will not go out to dine like we do, and will impact restaurants like yours. The state can’t have it both ways, I’m concerned more people who are at the lower end of the job scales will have fewer jobs available, as employers will have to cut someplace. thanks tom We always enjoy dining at your restaurants, too.

  13. Paul Bronson Says:

    I agree with your points about tip wages Tom. I appreciate your voice and candidness. Thanks.

  14. john S Says:

    My fear is that the city council and the mayor will shove this down the taxpayers throats, with like Tom States absolutely no worries about their own futures, as they have no skin in the game. I have 3 resturaunts and employ 40 people and have been at it for 20 years. My wages are from minimum wage with a tip jar to 20$ an hr with full medical for all managers, up to 3 weeks paid vacation, profit sharing, gym dues, paid sick days, paid maternity leave etc.If this in sane 15$ now is enacted, i will be forced to raise my prices and eliminate some benefits, and definitely lay off people. I can afford to absorb some minimum wage increase but 15$ across the board is insanity.

  15. Angela Shen Says:

    Thank you, Tom. You have always been community-focused. The adverse impacts of $15 NOW are far-reaching, beyond anything that is currently being covered in the media. Thank you for starting the conversation from the other side.

  16. Dave in West Seattle Says:

    Thank you, Tom! It’s time we had some real conversations about minimum wage, and not headline-grabbing demonstrations on the 15th of each month.

  17. Barbara Peterson Says:

    Excellent summary of the issues at hand and the increasingly non-welcoming environment created by our cash hungry City Council. I hope they and the mayor have the capacity to search for unintended consequences and craft reasonable legislation. Thanks for your passion and support for a better Seattle.

  18. Allen Brown Says:

    You hit the nail on the head when you state that the 15NOW campaign started in the fast food industry. It is absurd that McDonald’s and Walmart help their employees sign up for SNAP, Medicaid, etc. We live in a society that believes in programs that help the very poor put food on the table but it has been taken advantage of by very large corporations that do not pay their employees enough to feed themselves. I think a simple solution would be to have a Safety Net Tax that is based on the amount of employees on assistance, like how unemployment goes up for a business if they have lots of layoffs. If you are Costco and you pay your employees well you would have a rate of Zero. Walmart would have to pay a rate high enough to collect the estimated 8 billion a year in subsidies that its low payed workers receive.

  19. Claire F. Says:

    Very well written by an incredible person and chef! I wish the whole city of Seattle would/could read it. Tom does a lot for the city that isn’t mentioned in this. Clearly he is supportive of every position in his restaurants. Very commendable.

  20. ba Says:

    I am sure that there is a way that a new wage law could be written to encompass tips. OR, perhaps, rather than having a system where not everyone tips their waiter/waitress (thus depriving them of “wages”) the smart thing to do would be eliminating the tip system altogether and creating a system where the staff makes a reasonable wage without relying on a 15-20% gratuity on their meal.

    I don’t always tip. If the service was bad, I don’t tip. If I get cold food that is warm, or hot food that is cold, I don’t tip. Sure, sometimes it is the fault of the waitstaff. Sometimes it is the fault of the kitchen. Recently, I was at a place where they were shorthanded, so my waitress was covering two sections instead of just her own, resulting in poor service for everyone. I tipped, because I go their often enough that I am on a first name basis with several members of waitstaff. But because the boss didn’t want to call in another staff member, service suffered–and I would bet tips did too. Tips are just a lousy way to pay people. You are relying on the goodness of the people who are in no way required to pay the tip. What if, instead, you simply raised the prices 15-20% (which is what you are hoping they will tip to begin with), and did away with tipping? It isn’t a new concept–it has been done other places.

  21. Neil Colburn Says:

    Really well put Tom. We are a mom and pop Cafe near Langley on Whidbey Island in our 31st year of business. It’s really hard to pay the kitchen folk what they really deserve, while the wait staff, who of course work also are rewarded for the busy shifts the kitchen is not. You hit all the right buttons, so I will only say thank you for articulating the issue so well, Kind regards, Neil Colburn. With my wife Co-Owner Neil’s Clover Patch Cafe, Langley

  22. dane sorensen Says:

    You have always been a man of your word, a man that respects his staff and always welcomes a stranger to visit about restaurants. What a wonderful letter. Let’s hope that our voted in leaders understand what can happen if this $15 an hour is voted in.
    thank you
    dane sorensen

  23. Scott Heimendinger Says:

    Tom, thanks so much for writing this letter. It’s very helpful to us outside (or on the periphery) of the restaurant industry to have some insight into how it will impact restaurants.

    I know this isn’t the question at hand, but how would the impact of the propsed $15/hr minimum wage change if we also moved to a model that didn’t include tipping? In other words, if tips were included in menu prices, and wages were adjusted accordingly, would the impact of the wage increase be lessened, worstened, or unchanged?

    Thanks again,
    Scott Heimendinger

  24. Katherine Says:

    Very thoughtful analysis. I wonder, how would it change if you paid FOH and BOH equally, raised prices to cover it, and disallowed tipping? Would the prices for patrons increase substantially more than when tips were included? Tipping itself is a questionable custom. Charge what the product costs and manage employee performance via more traditional tactics. Would love to know your thoughts on this.

  25. Thomas Murphy Says:

    Well stated, maybe you should consider running for office and bringing more intelligence to Seattle and business development.

  26. Devin West Says:

    Move your businesses over to Bellevue. That’s what every other smart, savvy small business owner is going to do. Business climate in Seattle is too hostile for people willing to put skin in the game these days and only getting worse as these short-sighted populist movements without regard for unintended consequences gain traction.

    You’re to be commended for your efforts to consistently pay above the minimum requirement at the expense of your bottom line, but no restaurant is going to be able to absorb a 20-40% increase in worker costs, an additional 30% in inventory overhead, and a drop in patronage to boot.

    John Howie saw the writing on the wall quite some time ago. Seastar Seattle might end up at risk, but Seastar Bellevue, JHS, and that new gastro and distillery he’s opening in Bothell will be just fine.

  27. Jon W Says:

    Would love a Facebook share button, this is a wonderful letter to share.

  28. Eric Robertson Says:

    THANK YOU!

  29. billy king Says:

    Give ‘em hell Tom!

  30. Eric Minor Says:

    Well written Tom. I agree with most of your points wholeheartedly. Where I disagree slightly is where you veer just a bit from embracing free markets the whole way (IE possibly supporting an increase to MW provided tips are accounted for). While $15 per hour will be disastrous to you and the businesses you’ve nurtured for 25 years, $11 might be disastrous for some other small business, like an antique shop or small ice cream shop, that is just barely staying afloat.

    Free markets do work — you proved it yourself with your story about your *voluntary* efforts to increase the BOH pay at your restaurants. Coercion is wrong, whether is be the coercion of armed robbery or the coercion of government forcing an employer to pay X. If you google “Milton Friedman Minimum Wage”, the first link that comes up is a short 3 minute interview snippet from the ’70s that is a favorite of mine that is extremely relevant to minimum wage discussions.

    You have my full support in your efforts to dissuade the city leadership from pursuing this harmful course of action. I have become somewhat active in this effort and have actually taken the time to pen several op-ed pieces (yet to be published). Feel free to contact me if you think I can be of any assistance.

    Thank you,
    Eric Minor

  31. Bruce Deimel Says:

    Very well stated Tom. I as a server agree that the wage needs to be directed to those whom actually need it. Cooks, dishwasher, maids, janitors etc.

  32. Suzie hanson Says:

    Thank you for your thoughts on this issue!! I have been waiting to hear from you! You are an incredibly important person in Seattle!

  33. Tracy Fox Says:

    Could not be better stated!! As someone who LOVES Seattle and tries to visit from the midwest at least once a year, those visits are not without thought as to what our household budget can afford. I’ve also planned business conferences in Seattle and struggled to find affordable lodging and dining for out of town guests seeking to keep expenses in check as they are small business owners too. This “quick fix” approach without exploring the true ramifications of increasing minimum wage will do so much more harm than good. Hopefully the leaders of Seattle will listen to Tom and others and protect the future of everyone, not just those looking to make $15 NOW.

  34. Eric Rising Says:

    Very well written. I’ll be sure to share with everyone!

  35. Bubba Says:

    I agree with Tom. However it’s hard to generalize a “tipped employee” wage category. A waiter at one of Toms restaurants will make far more in tips than a barisra at a coffee stand in Tukwila, yet they should make the same reduced hourly wage? The real answer is to do away with tipping as a custom altogether. I stopped tipping years ago, I cant even begin to calculate the money I’ve saved. Money I am then free to spend on the increase in prices to facilitate a living wage for all workers. -Bubba

  36. Kris Barrows Says:

    I have respected your talent and restaurants for years – so reading this perspective has been very educational for me. My heart has been saying $15 NOW – but my head has not been able to embrace it. This article has been a great help in understanding some of the many layers of a “good thing.”
    Thank you for sharing your thoughts.

  37. Katy Keenan Says:

    Well, finally perhaps the best, most sound, thoughtful, global, comprehensive and sage perspective to explain what the problems with 15NOW are to the restaurant and hospitality industry in Seattle. One thing that is really obvious, to me anyway, is that a problem with the NOW notion is that it required and begged for an impulsive response, either STFU or jump on the ship, which is frankly stupid in light of the long term (unknown yikes) effects. Tom’s response has demonstrated that it’s important to consider all the facets and scenarios BEFORE making a decision on how to proceed which wholly belies a NOW type campaign. I have found myself tossing and turning this issue in a hundred different ways. And NOW I am glad that I wasn’t so quick to put on the red shirt……..cuz it just doesn’t fit all the players. So, yes, NOW is the time to get smart and think about the future of 15 to help workers and protect businesses. And, I personally wish there was some way that Seattle, as the chosen petri dish for all kinds of mavericky notions, could go out on a limb and demand that multi-national chains, not based in Seattle are held to a standard when operating within Seattle, which may be quite different then they traditionally enjoy nationally and internationally, whether it be a requirement for professional development of their staff, higher taxes, rent, requirement for medical benefits, something that shows that we aren’t just the litmus testers for speculative notions, but the proponent of uniquely progressive economic ideas. Thanks for keeping me on my ideological toes……more to thing on NOW!

  38. Denise Says:

    As an accountant for more than 30 years, I appreciate Tom’s take on the $15NOW imitative. I’ve had several restaurants as clients and from that experience there’s no practical way to raise the wages overnight to $15.

    Does Seattle want the downtown core and neighborhoods to be littered with dark and empty spots where cafes, diners, and first class restaurants once were? How would that benefit the city, visitors, residents, and the very people the $15NOW group want to help. It would be the absolute opposite.

    Thanks Tom for this reasoned and reasonable response. My husband and I will be dining at one of your joints tonight.

  39. Joel Ferrell Says:

    Well written letter, Tom. Please send a copy to the NY Times and the Wall Street Journal.

    Also, thank you very much for your generous support of many local organizations, especially FareStart.

    Joel Ferrell

  40. Howie Bargreen Says:

    Japan tried wage increases in the 80′s and it priced them out of export markets. Now Germany will raise their minimum wage to $11.50. This may help Germany as they have a trade surplus of 6%, and that slows economic growth for their trade partners, and thus their growth. US corporate profit margins have doubled in 25 year to almost 10%, so business can afford to pay their workers more. The problem is how wage inflation will change our balance of trade that was 400 billion over the last twelve months. This 400 billion is financed by us, and outside countries like Japan and South Korea. I think the US better get to a much lower balance of trade, before starting wage inflation. The US government could help our balance of trade by exporting more oil, and exporting corn, instead of making ethanol from corn. Also, the US needs an organized export system for small manufacturers like Hong Kong and China has. It is easier for me to source from China than the US.

  41. Rob Tallon Says:

    Thanks for putting this well, Tom. I think an exception for tipped workers is well within reason. I also think the aim of initiatives like this is to improve the plight of workers who don’t have the good fortune of having a boss like you who cares about his employees.
    Here’s to hoping we can find a way to help workers at McDonald’s and Walmart without hurting smaller, more considerate businesses like your own.
    Hi Uncle Dane!

  42. Chris Whitmyre Says:

    Thank you for speaking up. I am also deeply concerned about the impending consequences of this arbitrary increase. I am perhaps as deeply concerned about how Seattle leadership is bowing down to the bully mentality of 15Now. Their demonizing of any opposition is disgusting, and should disqualify their efforts on this basis alone.

  43. Tomasz Says:

    What if you increase prices by 20, support $15 minimum wage AND eliminate tips? Works for me as a guest, as it’s a zero net increase. Works for you. Maybe it is the servers that need to get their act together and call the mayor.

  44. Carolyn Heffter Says:

    Tom, Thank you for the well written, factual letter. My fear is the people who really NEED to read it, those who should see the WHOLE picture, don’t or won’t. You voiced many of the issues and I am sure there are more. Thank you, Carolyn

  45. John Cook Says:

    Thank you Tom for a very well thought out and written letter. Well said. I hope the people of Seattle get it right. The City Councilmembers need to think this through properly and not blindly put this minimum wage increase into effect.

  46. James Livingston Says:

    Tom, I think your statement is well thought out, articulate, and represents the view of a responsible businessman who cares about his employees and the experience of his customers, as well as the larger community. You’re to be applauded, as others have said. You and businessmen like you, as you observe, are not the bad guys here; you identify those e.g., WalMart, MacDonalds, as the source of your own frustration, with legitimate criticism of their “business model”. So far, we’re in full agreement. I didn’t see any suggestions in your eloquent statement, however, about what to do about the folks who are causing you frustration.

    Here’s the thing: what is the society to do about those who aren’t responsible like yourself i.e., how do we require responsible behavior of those who have chosen not to engage in it? That’s what this $15NOW initiative is aimed at, motivated by desperation over a minimum wage that hasn’t kept pace with inflation for fifty years — the $15 is what 1960s minimum wage would be if it had kept up with inflation. What’s the alternative?

    Again, thanks for a most thoughtful and significant contribution to the discussion of this most important issue.

    Cheers,
    jwl

  47. Mina Williams Says:

    A thoughtful, well-balanced look at the topic.

    Should this come to pass a lot of Seattle restaurant workers will become unemployed and the suburbs will gain new dining options.

  48. Alberta Weinberg Says:

    Dear Mr. Douglas,
    Thank you for clarifying an issue I admittedly knew nothing really about other than the glib slogan. Your letter has helped me clarify my own thinking. I was a small business owner downtown for ten years and I know how hard it is to make a profit–even 5%. I admire you for your product and your liberal employee pay and vacation position. You are an example for all employers of doing the right thing. So thank you!

  49. Danielle Says:

    May this also include the current worker to CEO salary ratios? So that I may better form my opinion of your words? Could the money to offer this minor increase to the wages of workers be found in that 1% of profits above the national average, without having to increase prices by 20%? And if not, why?

  50. Denise Doherty Says:

    Good points on fast food vs. tips employees. Washington is one of the few states without a separate wage for tips employees.

  51. Mal Jones Says:

    Not only an incredibly well written letter but within an important and well constructed message that all should take note of. I agree Tom, in the “slogan” world, $15NOW sounds great, but what people miss is that this will only truly effect social entrepreneurs like you and so many others who do all they can for there employees, their peers, their neighbors and their city. Also I believe the city does not understand the medium term effects to their Tax dollars as the city over prices itself and discourages business and personal tourism as well as significantly reduce taxes from locals choosing to eat etc at home, will, ironically, effect the jobs of many in the minimum wage bracket.
    As a city we need to encourage and support socially responsible businesses. As an entrepreneur myself, I strongly believe that for profit business is a right, but also that businesses need to give back to their community when able.

    let the Market set the pay rates and only intervene in cases of moral and ethical injustices by big box employers who have abusive employee practices.

    Mal

  52. Bob Nowlin Says:

    Excellent summation Tom. It really says something important when one of the most generous companies in Seattle speaks up on these issues.

  53. Gordon Naccarato Says:

    I concur whole-heartedly Tom. I have ridden the same roller-coaster as you with the economy’s ups and downs, and have come very close to losing a restaurant or 2. I have nothing but fondness for both my FOH and BOH staff, yet paying Servers–some of whom have made more than $80,000/year while working for me–and also having to pay them $15/hr minimum wage to me is absurd and ridiculous. Thanks for your well-reasoned thoughts on this important topic.

  54. Jill rosen Says:

    One of the most brilliant thoughtful opinions I have read in a LONG time. I agree with every word….thank you Tom.

  55. Carolyn OKeefw Says:

    God Bless you & the success of this wonderful movement!It is time…Very eloquent/thank you Tom.

  56. Blake Says:

    Wonderful letter Tom. Very well said.

    On the other hand, though I suppose it is a complete pipe dream, I’d be so happy if the the price on the menu were the price of the meal; if I didn’t have to pay your wait-staff, in addition to paying for food and prep. I’d do handsprings, if you’d jump on the $15/hr min wage, and rail this effectively against tipping.

  57. Dick Campbell Says:

    Tom is a fine gentleman and his statements a very good and fair. I hope our elected officials pay attention to what he has said and give restaurant owners a fair chance. Small business owners do have a tough challenge ahead and need to be considered to continue to stay in business.

  58. Lindsay Says:

    Such great words. As a server in fine dining for over 15 years, I agree with you 100%. I fear what will happen to my beloved profession if this increase takes place. Keep up the fight – people will listen!!

  59. Lewil Shedd Says:

    It IS well articulated. But I assume that your 5% average profit is true bottom line. So, after labor, cost of sales, restaurant expenses, (China, Glass, Silver, Smallwares) Marketing (Advertising, and In House expense), Occupancy (Rent, Lease, Mortgage, Taxes, Depreciation) On top of the medical leave (How many of those servers take the medical leave by the way?) You are ONLY walking away with 5% profit per year on %50 Million in sales? After you have paid the Chefs $75-100k per year, the Managers close to that, the rent, the food service providers, everything else…. you are only walking away with 5% profit on $50 Million. ……….. I am in no way suggesting that you are Walmart. However, if the increase to $15 per hour cost you, say 3% of that 5% profit, you do realize that the “little” company that you and Jackie founded would still net you and Jackie $1 Million per year in profit. And this would be without any price increase on your end, which is unlikely to be the case, and also without any increase in economic activity by those who could (thanks to $15/hr) actually go out to eat, or buy groceries or clothes for their kids. Sure some, like me, would be less likely to go out to eat. Some would still go, and end up paying the majority of the cost of the resulting price increases. Those in the latter group would be those who could still afford to frequent your restaurant. $15NOW absolutely benefits those at the bottom at the expense of those better off. This isn’t a mystery. You are correct that $15 is an arbitrary number. But so is $17.50 or $23. (So was &7.50, $9.32, and even $3.10 when I first started working) All of those numbers were also sure to result in apocalyptic business closures of biblical proportions. And yet here we are with small business owners still able to run a restaurant group and eek out a living on a mere $2.5 Million in profit. A testament to the human spirit.

  60. Jeff Alan Fowler Says:

    some people think they know it all. haven’t the last 32 years of trickle-down economics shown you anything yet? it’s a total failure! do you ever shop for groceries? holy fuck! the prices! and you can’t blame minimum wage because it has not gone up!

  61. Shari Winstead Says:

    Tom, open a restaurant on Shoreline. It will be successful and you won’t have the Seattle bureaucracy. Trust me, I’m the Mayor!

  62. Terri Boyd Says:

    Mr. Douglas, thank you for speaking up and out in honesty about $15 NOW. I hope it helps educate people about the real truth of what is involved in ‘BOH’ and ‘FOH’ wages. More people need to hear the reality of what will happen if minimum wage goes up to 15.00.
    Maybe this is crazy but I wish I just read your letter in the Sunday Times, just thinking!

    Thanks for taking the time
    Terri Boyd

  63. Olivier Santos Says:

    I agree; and I am heartened by your thoughts on this highly-charged issue. Thank you.

  64. Maggie Says:

    Really a well written article/plea. We owned and started bakeries in Seattle and it is a difficult business in which to survive. You are absolutely correct in that everything should be considered in a wage. People would think that your are filthy rich because of your presence, but 5% doesn’t do that. You pay well, your benefits are good. What non-business doesn’t realize is that if the wage for evryone as a minimum goes to $15 benefits must drop or owners will be out of business. Many owners don’t make $15/hr. Idealistically, it is a great idea, but everything will get more expensive, it has to. We are not Europe–people don’t pay the same taxes or get the same benefits. Maybe we should look that way.

  65. Barb Says:

    More money always sounds good, until you are out of a job. Let’s see.. would we all prefer a lower wage, but a continued rebound in unemployment, with jobs offering minimum-experience employees the opportunity to prove career skills and earn references to move up to higher paying positions; or, do we prefer to enact legislation that forces small business owners to lay off staff, close down or never begin a new small business, while big corporations who can afford a 50% wage hike fill that void? “Buy local” will soon mean “buy at your local corporate-owned franchise” if this 50% wage hike goes through. I love your thought about $15 NoW needs to include the other benefits and total compensation as the $15 bar — to ensure compassionate capitalist businesses like yours are easier to find for minimum wage employees. Hmmmmmmm… such a no-brainer to vote this down.

  66. Gene Says:

    Most of the ire of this movement, as you pointed out, is pretty much directed at the fast food industry. You are right to point out that they have de facto government subsidies, in that, they don’t pay or insure the vast majority of their employees and leave it to government programs to supplement their low incomes into something that resembles a livable source of income. I sincerely hope that the mayor and the city council will take a long, hard look at this proposal. slogans are great for chanting, but a poor way to run a business or a city. Let’s take the right and fair option!

  67. Jim Rowe Says:

    Well said Tom

  68. Jim Curran Says:

    This is truly a great explaination of the restaurant business throughout the state & probably the nation. In Spokane, we have watched while restaurants, both corporate and non, have closed there doors.

    People will say that they are sad that this place or that has closed and wonder why?

    It’s the recession, increased wages, taxes, regulations, fees, rent, insurance, utilities,theives, etc.
    As a truly SMALL business (Owner operated since 1978)we have continued to keep our 5 employes by
    living on our social security & some savings.

    Why do we continue to go to work at 5 am & go home at 4 pm monday – friday?

    Pride in our work? Yes! And hope for the future.

    But also if we close our business it would mean 5 more unemployed people for society to deal with.
    And lose of those increased wages, taxes, fees, rent, insurance, utilities & another empty building for theives & taggers, etc. GOVERNMENT NEEDS TO CONTROL IT’S APPETITE FOR MORE AND MORE FROM ALL OF US.
    thank you
    jim curran
    From the other side of the same state.

  69. Lisa Dupar Says:

    Thank you, Tom, for such a well crafted, expertly thought out article. You have always been generous, fair and honest with all stakeholders, while working tirelessly for our entire community of chefs and restauranteurs. I hope each person who has the vote on this, has a chance to absorb your text before making any final decision.

    Again, thank you for taking the time to explain this to others who may not understand the nuts and bolts of our industry.
    Cheers, Lisa Dupar

  70. Judith Malmgren Says:

    Thank you Tom for speaking out. In other service industries like athletic clubs the cost will not be passed on but jobs will be cut to maintain a profit margin. As much as $15 NOW sounds like the nice thing to do it is not nice to put businesses out of business and defeats the purpose. The city council needs an economist or at least someone who knows math on the committee and leave the rhetoric at the door. Successful businesses are run on dollars and cents and a viable business plan does not include a wholesale increase of the bottom line without the consequence of where the money is going to come from. We are all grown ups here and the Disneyland approach to improving the lives of minimum wage workers is not going to turn Seattle into the Magic Kingdom of wage equality.

  71. John H Says:

    As a restaurant professional for the last 25 years, I couldn’t agree more. Thank you Tom!

  72. Danny Glasser Says:

    Have you considered moving your restaurants to a “service compris” model, so that your FOH (and BOH) compensation structure is fully determined by you and your staff?

  73. Andrea Nakata Says:

    Tom—thank you for speaking out on this $15 minimum wage issue on behalf of all restauranteurs and small business owners.
    I can certainly relate to your story although on a much smaller scale. I own a bakery and cafe on Queen Anne which I opened a little over three years ago. I too have invested a great deal of blood sweat and tears as well as a large financial stake in my business. They say it takes 2-3 years to establish a new business and up until now things have been going according to my business plan. We’ve built a great reputation and wonderful clientele and the bakery has been thriving. However, all of that is being threatened by the $15 minimum wage that our mayor and the city council are proposing. I am in support for paying our employees fair wages however there needs to be more consideration for small businesses particularly in the restaurant industry that cannot handle such a drastic hike. If this does not happen communities all over the city will see the small local businesses close their doors and the consumers will ultimately pay much higher prices. $15now is a great slogan, however it is not that simple, we need to look at all the ramifications first before we make it a law.

  74. Gary Kunis Says:

    A very thoughtful piece. The $15NOW proposal is simply a sound bite brought to life by politicians lacking experience and owing their elections to Union financing. Sadly it will be local businesses that have to bear the burdens of this proposal. Local businesses will be closed and local residents will lose jobs and / or benefits. The measure will not have any effect on Wal-Mart or McDonalds at all.

    Tom Douglas is a good person who has managed to build a business that attempts to blend operational efficiency with product quality and civil responsibility. It is terrible twist of fate that Seattle City Government will intentionally attempt to hurt businesses like Tom’s so that our Socialist City Councilwoman and her supporters can ‘hurt Wall Street’.

  75. Ray Says:

    Thank you for your successful, honest, statements with true real life experience reigning through.

  76. Stu Friedman Says:

    Tom
    Are you sure you are not a successful lawyer?

    Your argument is well stated. This $15/hour movement is pushed by people who have never had to meet a payroll, or owned a business, or worried how to keep the doors of a business open.

    They have never read the tax laws and understand what a small business has to pay in B&O taxes before any profit is made, Social Security employers contribution, Payroll and quarterly taxes. These bozo’s don’t have a clue what the small business owners contribute to L&I taxes. They don’t understand that most of the employment opportunities are provided by the business owner way in excess of Ford, GM, Boeing etc.

    They don’t stay up at night worrying about the next move to make just to stay even with the mandates our legislators, local, state and federal, nor the hours away from family, friends the small business owner invests to have the privilege of working 60 to 90 hours a week to support a dream.

    Ed Murray may be a nice guy, but he is clueless.

    My support from my wallet goes to the small biz owner, and to you just because you make sense.

    Stu Friedman
    Wineguy

  77. Gordon Sanderson Says:

    Well said,it is not about who shouts the loudest…it is about what is best for the people and the business. btw….nice job on the AMTRAK menu.

  78. Kathy Kroft Says:

    Thank you for explaining this issue in very understandable terms. I commend and support you. May everyone use their brains and grasp the facts.
    Respectfully,
    Kathy Kroft

  79. Jeff Williams Says:

    Tom- first and foremost, thank you for your transparency. I’m delighted that you’re trying to have this conversation as open as you are. I don’t agree with everything you have said and will say up front that a minimum wage of $15 is something with which I think doesn’t go far enough. I’ll also say that you’ve swayed me on my previous opinion that any business which cannot pay its workers at that level doesn’t deserve to be in business. It’s a very real feeling I have having looked at the MIT analysis of “living wage” and yet I absolutely agree with your comments around total compensation. Your staff meals are a stunning benefit– I’d love to eat like that. Your vacation policy is worthy of respect. I also salute you for pointing out your narrow margins (although, having not seen your books, I can’t necessarily agree or disagree with your statement that nothing can be cut to support a wage hike.)

    But, most importantly for my comment here, you make a very direct statement that if this wage hike comes to pass it means a 20% increase in prices. I am a frequent diner at your restaurants as well as many others in both Seattle and Portland. I know that I’m in a fortunate position to be able to do that and that I am not your average customer. That said, I always overtip knowing what pay is for both FOH and BOH because I’m friends with a lot of them both now and over the last 20+ years. I’ve seen how my friends have struggled (not your employees, to be fair) with making ends meet. I want to go on record as saying that if the price of my meal has to go up 20% in order to do this, I welcome it. I’m not likely a majority voice in this opinion but, even as a minority, I want my voice out there.

    You’re right about downtown and parking meters and many other things but, as one who lives in a nice neighborhood that has NO restaurants whatsoever within walking distance, I’m not sure those are unsolvable problems. You’re right that the parking and shopping aspects decrease foot traffic draw to your restaurants (I’d go more often if it wasn’t the case). But, to hinge your argument on that against a higher wage for your staff seems to me to be out of place.

    Legislation occurs when the market doesn’t sort itself out. If you look at cost of living, living wage studies and similar it is very easy to make a case that today’s minimum wage is inadequate. I love that you led the charge with your earlier efforts and that you have terrific benefits (which I do not want to see you cut). If you have to charge me more, I want you to do that. Because, as much as I love you and your restaurants, my meals would be nothing if it was not for your staff and everything they bring to my experience whether they are FOH or BOH.

  80. Starbucks, Douglas will be roasting the good stuff at new Capitol Hill facility | CHS Capitol Hill Seattle Says:

    […] first project on the Hill. As an employer of hundreds in the city’s food industry, Douglas has been an outspoken critic of the push for an all-out $15 minimum wage in […]

  81. Minimum wage, restaurants, and seeing the whole system » No measure of health Says:

    […] lines from people whose establishments I love and wouldn’t want to lose. I’ll link to Tom Douglas’s letter because I think it’s the best reasoned, and the level of detail he goes into about their cost […]

  82. Ann Says:

    Well put! While I admire the spirit in which the $15/min wage movement was born, it’s not a concept that can be cast with a broad net without regard to industry specifics and pay structure (including tips). Thanks for being an integral part of the conversation, Tom!

  83. maria Says:

    i am a waiter in Seattle and i couldn’t agree more with Tom Douglas. between the already high WA state minimum wage, and my tips, i am amply paid for the work i do. there has to be a provision to exclude tipped workers, give it to the people who really need it, who work 40 hours a week and still can’t get by. That is no waiter i’ve ever known. this might finally bridge the gap between the back and front of the house in restaurants, an absurd disparity that’s never sat well with me.

  84. Patrick Robinson Says:

    Powerful testimony and an antidote to the simplistic sloganeering that often takes the place of reasoned dialog. It’s not likely the major fast food chains will change their business model unless rules are put in place that forces them to adapt. As this piece points out there is a very clear distinction between fast food businesses and tipped dining. The rules MUST be different and while poverty must be countered, a broad rule based on a catch phrase is no way to approach it. Unfortunately “WAGE EQUITY NOW” is too hard for most to latch onto and grasp.
    I’ve met you several times Tom and EVERY time you are gracious, kind, well spoken and easy to talk to. I agree with you. Thank you for your thoughtful essay on this.

  85. Mike Davis Says:

    Hi Tom,

    I agree. I think you are to be commended (and I can say you frequently are by people who work for you)in your efforts to transition the food industry into a respectable and rewarding career, not to mention the enjoyment you provide your customers. The link for my blog http://mdsoundoff.blogspot.com/2014/02/income-equality-minimum-wage.html that I entered above has an article I wrote a while back. The gist of my piece is that it is affordable, but it needs to be phased in. No restaurant could take a hit that increases wages 50% in one year. In fact no business anywhere could survive that. Whoever the folks are that are pushing the NOW campaign know little or nothing about running a business.

    I think the vast majority of people will come down on your side of the issue.

  86. Russell Eberts Says:

    I’ve been in the restaurant industry for eight years, and also work at a local non-profit. I couldn’t agree more. I do not understand why people don’t see the consequences of such a precipitous wage hike. Instead of forcing artificial inflation on the whole of Washington–which will increase the tax burden on the poorest segment of the population even more, while also severely effecting the job market–we should INSTITUTE A STATE INCOME TAX SO THAT WASHINGTON NO LONGER HAS THE MOST REGRESSIVE TAX CODE OF ANY STATE IN THE COUNTRY. It is disgraceful that we do not have an income tax, and the proposed “solution” to trying to help out the poorest segment of our population is to increase the prices of most of our goods while hamstringing small businesses and non-profits.

  87. Darrell Says:

    I would like to commend Mr Douglas with his well thought out response to 15NOW. I have been in the Seattle restaurant industry for 30 years before moving to the Midwest. I often follow the NW food scene and am appalled by the lack of a level playing field that fine dining restaurant have to negotiate. Minimum wage increases, lack of a tip credit, shrinking qualified workforce, increased focus on “farm to fork” ingredients, transportation cost, special taxes levied on only one industry make it virtually impossible to have a successful model. Once again, the industry is being singled out. What is a living wage? Is it $15 an hour, or $15 an hour with benefits, or is it $15 an hour with benefits and tips? This is the question that needs answered first. When our government can answer those questions, then we can entertain plans to achieve the goal. A mandated law, that doesn’t look into the whole scenerio is foolish. The consequences will be harmful to long term growth in the region.

    Seattle is being watched by the nation. As a restaurant owner, we are successful with our Midwest model. I believe that if the 15NOW became law in the Northwest and thus eventually moved to the rest of the country, fine dining would no longer be a viable option. It would be replaced by a “waiter less ” restaurant.

    Please encourage the Seattle city council to truly evaluate this measure.

  88. Beth Hartman Says:

    As the owner of a small business and an employee of a non-profit organization here in Seattle, the idea of a $15 minimum wage would be devastating to both entities. Thank you Tom Douglas for a thoughtful article.

  89. Bruce Says:

    Late to the discussion, but agree… “total compensation” needs to be injected into the debate.

  90. Bruce Says:

    Nice job, Tom!

  91. Clairee Meeks Says:

    Excellent information and hopefully many voters will read it and give it serious consideration. As a former food service employee, I wish I’d worked at places that had such good employee arrangements and relations as yours do, and wish you well in all future endeavors.

  92. Wendy Says:

    I do appreciate you speaking out about this although, as a small retail business, I worry that there has been so much focus on total compensation (which I support)that “they” will give in on that but destroy the retail sector. I don’t think any of the people pushing for $15Now really care about anybody but themselves and their legacies. They fully admit that they don’t know what the outcome of the $15 wage would be and they seem more than willing to gamble with the lives of so many in this city.

  93. Sean Brannen Says:

    Hay, Tom, I agree with you that BOH should fall under the 15NOW while tipped positions remain at a different minimum wage. I almost always agree that across-the-board mainstreaming of economic and socioeconomic policies is a bad idea. There are too many exceptions.
    Society is not a machine, and, though some think the system is near perfect, humans are imperfect. Those who say we are closer and closer to perfection are prolly right, but I would have to say that we are far from the perfection. Also, the more perfect we get, the deeper our problems get. Being “perfect” has its costs and those things at stake, like the culture of the Tom Douglas enterprise and its inspiration, meaning, and economic drive for Seattle, can become sacrifices.
    Sure, it makes a politicians job easier to invoke these policies, but I don’t think Politicians become politicians to have an easy job. They want to see a different world and change isn’t always easy. There are growing pains, as there were (and are) with Obamacare.
    In general, one fear with a smaller government is that the policies would be even more streamlined because there wouldn’t be a big enough force to investigate and handle the socioeconomic issues that arise from strict streamlined regulations.
    Someone like you and O’Brien have good insight into the style, motions, and fluxuations of the Seattle community. Our culture is unique, and, bending towards this theme, we should not streamline inflexible policies without making exceptions for the unique. Tom, you are a strong force, and I’m glad I’m perfecting your coconut cream pie. However, once I perfect the consistency of this pie, I will not stop there, because I am already contemplating the variable of an almond flavoring.. Thank you for your contributions to our world.

  94. Stephen Brock Says:

    I like the comments made. It seems as though Tom has thought sincerely about the topic and has considered the unintentional ramifications. And it also sounds as though he runs his business in a thoughtful manner.

    I’m not sure if it is a local thing or something that would need to be done on a state level, but in many (most to my belief) tipped staff have a scale factor on their wage. That is, a tipped staff’s minimum wage is less per hour to account for the fact that they get tips. I know that in VA and PA the rate is 60%. MD was the toughest I’ve seen at 50%. So a waiter in MD gets paid MinWage*0.5 per hour.

    That is in essence what Tom is asking for in the letter. He notes that the wage should be increased over five years for all BUT tipped staff. Essentially creating two different minimum wages: one for non-tipped staff and one for tipped staff. This seems reasonable and is common practive in many states.

    Fingers crossed that a successful resolution is reached for the Seattle area, and for Tom and his employees.

  95. j.n.akers Says:

    Some great and legitimate points are made, however the entire point behind raising the minimum wage is to stoke inflationary pressures. Considering that expansionary monetary and fiscal policy have been ineffective at lifting spending from the top down, it is only logical that using a bottom-up model of raising minimum wage be adopted. Hopefully you’re right and we can stoke stoke demand across several sectors by artificially increasing revenues. It’s a roll of the dice designed to shake up the existing status-quo and stoke the engines of economic activity across the widest swath of the population possible.

  96. Kamyar Khoshdel Says:

    Tom, I wholeheartedly agree with you on this subject. Nice job.

  97. SUSTAINABLE WAGES SEATTLE – Tom Douglas Says “CAUTION” on Wage Increase Says:

    […] Tom’s Letter on proposed $15 an hour minimum wage increase […]

  98. Deba Wegner Says:

    It is good to have someone who is an undeniable leader in Seattle hospitality present a balanced and complete summation of this issue. Even better, that it is someone, who has a long,stellar track record, a rip roaring success story…that became that for many reasons, but not the least of which being: treating the employees/team right(Costco also comes to mind). The “movement” doesn’t know the details and ins and outs of restaurant employee compensation. Even those broaching the subject for the first time can not image how it works, how the funds are “distributed” and who, owners, servers, kitchen staff, office employees are left holding what at the end of the day, week, month and year. We can only hope that the various stakeholders will ask hospitality leaders like Tom Douglas Restaurants to weigh in before anybody makes any moves. Change of the current situation is needed, but going from one imperfect situation to another one just for the sake of proving a point or making the promised waves, shouldn’t happen either.

  99. C Cross Says:

    So cogent, so civil. Would you consider running for office, Mr Douglas ?

  100. Karey Says:

    This is awesome! Exactly what needs to be said!

  101. Frank Rizzo Says:

    Sorry, I disagree.

    Your business is not like all business. Some are run poorly and make a lot of profit. I was a restauranteur for 20 years, I even lobbied for the California Restaurant Association. I could have written that letter 10 years ago. IN fact I left California fore the sole reason of them raising the minimum wage in the FOH in 2006. It SUCKS!!

    But it was fair. I the consumer should not be left to pay someone else’s wages. If you want to include the cost of the service in the price of the food, go ahead. I would expect great consistent service, and for that consistency LOYAL customers are born. As you know in the restaurant business, wen a server feels like having an “off” night from a night out having too many (and this profession is known for that) that server doesn’t have to perform. They in a sense right there own checks….at my expense!. There are too many crappy servers out there, I managed plenty of them.

    But what if you paid them more, and raised menu prices? What kind of server would you except to get and accept? We would all get better service and for way above average service, then you tip.

    Bottom line…You pay your employees, don’t expect me to.

  102. kiaa_nifoloa Says:

    The FOH folks are fine, it’s the BOH workers that this proposed law is for so that the whole house can prosper and thrive.

  103. Dana Says:

    Thanks for writing such a clear letter – I hope the advisory committee studying this for Mayor Murray take the time to read this. Moving too quickly and without considering total compensation would be a huge mistake. The whole country is watching Seattle on this issue – let’s not just run with slogans.

  104. Tom Curry Says:

    Tom,very well said. We are a small family owned and operated brewery in Port Angeles. Our staff are wonderful and we are grateful to have them. Bottom line they start at $10.25 an hour because we want to value them and their work. I would love to see 5% and am sure we will, but with our FOH pulling 10.25 + 20% average in tips, our staff makes much more than I ever have. We are three years old and surviving, but I would have to close the doors. Best of luck to you and all in Seattle.

  105. Capitol Hill businesses join forces big and small in minimum wage debate | CHS Capitol Hill Seattle Says:

    […] will make its Capitol Hill debut this year, jumped into the minimum wage debate last week with this letter on his blog. He called $15 an hour a hollow slogan and said “the $15 Now movement was born in the fast […]

  106. Shirley Sauvageau Says:

    Thank you Mr. Douglas. Let me know when you are running for office because you have all our votes. $15.00 minimum wage is unacceptable. Does Ed Murray, Council, and review board realize what $15.00 hour will do to businesses. Are they willing to give us a tax break for this increase? Last, lets look at the nations minimum wage in comparison. Los Angeles, Chicago, New York, all less than Seattle now.

    Great job for expressing all our concerns.

  107. ShelleyL Says:

    The following comment was submitted by Gail Longo of Cinquegranelli Montessori.com She sent this comment to us as an email so I am typing it in here:

    Gail Longo says:
    Hello Tom, Thank you for writing your important letter to the City Council encouraging them to reflect on their pending decision to raise the minimum wage to $15 an hour.
    Not all small businesses can provide a $15 wage to employees and meet additional costs of operating.
    Small businesses are just that. Small. They contribute to our communities by providing unique services. Employers agree with employees on providing meaningful, fair advantages for those who remain in the business. A leap into $15 an hour will cause inflation to continue, and/or small businesses to fail. We don’t need either of those to occur.

  108. Seattle’s top chef: Clear that Seattle City Council, Mayor have little business experience Says:

    […] being a proponent for a higher min. wage (though he does write “who decreed that it has to be $15?”), Douglas is not enthusiastic over Mayor Ed Murray’s plan to implement an across the board $15 […]

  109. Rick Says:

    Tom, your points are well made and backed up with a transparency rarely seen in today’s business world. The momentum for this $15NOW debacle comes primarily from fast food workers and their sympathizers who have jumped on a bandwagon without knowing the driver. Fast food restaurants operate on an “internship” model. Their employee are usually young unskilled workers, people without sufficient education and job skills to find a better paying job, or occasional seniors. These businesses can act as breeding grounds for those who want to develop their job skills and move to the next level, and many do. Sure, every McDonald’s worker would love to earn $15/hour, but the truth is that most are marginal workers who are paid fairly based on their contribution. I know of no one who wants to make a career out of working at McDonalds. Raise their compensation beyond their level of contribution and employees will be forced to cut their most marginal workers, the very ones who probably need work the most. Would they rather earn $10/hour or have no job? I do, however, believe that the McDonald’s and Walmarts of the world must have better medical plans for FTEs that stick with them 6 months or more, so the burden isn’t passed on to the taxpayers and that BOH employees in all restaurant should get a graduated increase over a five year period.

  110. Keith Wollenberg Says:

    Thoughtful, rational and reasonable. If only your City Council could say the same. Thanks for presenting your side of the story so eloquently. Next time I get back to Seattle I’ll have to make a point to dine with you once again.

    -Keith

  111. Here’s To Hoping San Francisco Voters Think Twice about $15 Says:

    […] this point, it would be prudent to direct anyone voting on this ballot measure to Seattle chef Tom Douglas’ open letter on the tremendous ramifications that a $15/hour minimum wage would have on the restaurant industry. […]

  112. The $15 Debate | Bellwetherhousing.org Says:

    […] the new wage. There are even some minimum wage earners who are against raising the minimum wage. In this letter, Tom Douglas gives a very clear indication of how an across-the-board minimum wage increase could […]

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