Restaurant chain says high minimum wages in places like Seattle caused its bankruptcy
A restaurant chain has blamed its recent bankruptcy on the increased minimum wage in cities like Seattle and San Francisco.
Here's what we know
According to the Seattle Times, Restaurants Unlimited filed for Chapter 11 bankruptcy on July 7. It is based in Seattle and operated 35 restaurant locations. It has also been forced to close some of its locations. According to KPTV-TV, Restaurants Unlimited is trying to find a buyer.
In court papers, Restaurants Unlimited's Chief Restructuring Officer David Bagley said "[o]ver the past three years, the company's profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage. As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes."
The company has locations in San Francisco (which has a $15.59 minimum wage), Seattle ($16) and Portland ($12.50).
Before it filed for bankruptcy, Restaurants Unlimited had raised menu prices and added an additional surcharge to compensate for the increased minimum wage, according to Fox News. However, these attempts proved ineffective.
Critics, however, pointed out that when the business was struggling, none of the six locations it closed down were in Seattle. Former Washington state Rep. Jessyn Farrell (D) told Fox News that this was "really telling" and said that it proved that the company was struggling because it "made some bad business decisions."
The Democrat-controlled U.S. House of Representatives passed a bill on Thursday that would raise the federal minimum wage to $15. However, this is not expected to pass the Republican-controlled Senate.