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Raising Minimum Wage is a Recipe for Disaster


In today’s news, it was announced that @Joes_Crab_Shack is eliminating “tips” and will raise minimum wage. To offset the increased cost to Joe’s Crab Shack, they will raise food prices 12-15%. Sounds like a food tax. You have to pay it “like it or not.” So even if you have lousy service, the server gets paid the same. What do they care? See just one of the articles here.

I typically tip 20% – ALWAYS. If service is really, really bad it would be less (12-15%) but I ALWAYS tip.

Without the tip incentive, I think it virtually guarantees that the overall quality of service will drop. You will always have the small percentage of servers who will always give 110% no matter what. It’s in their DNA. But it only takes a few cases of bad service to ruin the reputation of a good restaurant. JUST good food will not keep customers coming back.

To compound the problem of raising minimum wage…let’s say business gets slow and cash is tight. With a $14-15 minimum wage, the establishment is likely to hire FEWER servers. Instead of two $7.50 per hour servers, they hire just ONE! Then on those nights that are a little busy, Friday nights for example, the available servers are spread too thin. It’s perceived as BAD SERVICE. What does that do? It hurts the business and things get slower and slower until…it has to shut the doors.

What good did raising the minimum wage do then?

Raising minimum wage is a recipe for disaster.

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