Worcester Business Journal

8 Worcester Business Journal | October 1, 2018 | wbjournal.com F O C U S T H E F O O D & D R I N K I S S U E Restaurants look to price increases, staffing cuts to survive 80% minimum wage hike A dam Hicks wants his em- ployees to make a decent wage. He wants them to be able to afford rent, buy a new car and pay for school supplies for their children. He also needs to keep two busy restaurants in Milford and Worcester afloat. Balancing both of those goals in an industry with a low-profit mar- gin is now going to be more difficult with wages for restaurant employees increasing over the next five years. Under the Grand Bargain legislation passed by state lawmakers in June to avoid a series of ballot questions on wage and benefit issues, minimum wage will increase to $15 gradually for five years beginning in January, and the hour rate for tipped workers will increase to $6.75 an hour over the same period. "Adding these increases is going to make it harder to succeed in the long term," Hicks said. "is drives up wag - es for everybody." Figuring out how to stay in business According to Hicks, owner of Milford's Depot Street Tavern and sister restaurant Maddi's Cookery and TapHouse in Worcester, a good server can already make upwards of $35 an hour, and most of his cooks earn more than $15 an hour. Now, an entry-level high school student in the kitchen will start at $15 an hour. Seasoned cooks could then be bumped up to $20 an hour, if not more. To afford those salaries, menu prices may go up or fewer staff could be scheduled, said the restaurateur. "When costs go up, something's gotta give," Hicks said. Robb Ahlquist, co-owner of Worces- ter Restaurant Group, which owns and operates Via Italian Table, 111 Chop House and e Sole Proprietor, said in an email the Grand Bargain will be a significant hardship, especially for small businesses and restaurants. "But it's a done deal, and we now have to live with it," he said, calling it a waste of time to comment on the new government-imposed hardships. "We need to spend time figuring out how to stay in business," he said. Price increases or cuts e tipped minimum wage, increas- ing by 80 percent, will largely benefit servers, who are already the highest earners in the restaurant, said Steve Clark, vice president of government affairs for the Massachusetts Restau- rant Association. "If you factor in the last time mini- mum wage went up, we're talking about a 157-percent increase to labor costs on an industry that on average makes 5 cents for every dollar," Clark said. BY ZACHARY COMEAU Worcester Business Journal Staff Writer Grand Bargain fallout Server Patrick Mahoney takes an order at Worcester eatery deadhorse hill. The restaurant plans to offer the same level of service as wages increase. Servers throughout the restaurant industry will see their non-tipped wages rise through 2023. PHOTOS/COURTESY OF DEADHORSE HILL

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