Restaurants must absorb higher wage

ATLANTA --- A double-digit minimum wage increase is welcome for many Georgia workers, but it could take a healthy bite out of profits in restaurants statewide.


The state has 75,000 workers making at or below the minimum wage, according to the U.S. Department of Labor. Workers can be paid less than the minimum if they make up the difference in tips.

The federal minimum wage increases 10.7 percent to $7.25 on Friday, boosting the monthly earnings for a full-time worker $112 to $1,160. It's the last of three increases over the past three years.

Ron Wolf, CEO of the Georgia Restaurant Association, said restaurant owners would rather let market conditions set the wage. The increases have come over three years, allowing most restaurants to prepare. But the recession means many restaurants are already seeing fewer customers while food and gas prices rise, Mr. Wolf said.

He said the wage increase by itself won't likely force a restaurant to close. "But added to all the other factors we're facing in this economy, that's the unknown," he said.

Nationally, food preparation and service jobs account for 53 percent of minimum wage workers.

Lazondra Broughton, a single mother of four, makes $7 an hour at a Chester's Chicken/Blimpie sub shop combo in downtown Atlanta. The extra money will help some, but Ms. Broughton still needs welfare to survive and is looking for a second job.

"It's OK, but it could be better," she said of the minimum wage increase. "It could be more."

Atlanta-based Chick-fil-A, which has more than 1,400 restaurants, won't have to cut jobs because of the increase, spokesman Don Perry said. He said the minimum wage is often for new hires, and many experienced workers make more.

"We're not looking at this as something that's going to be unmanageable," Mr. Perry said.

He said Chick-fil-A could have to make a small increase on food with the wage increase coupled with higher costs, but it would amount to "cents on a sandwich."

"I think the customers understand you have to recover some of the costs to stay viable," he said.

Atlanta-based Wendy's/Arby's Group, the third-largest U.S. fast-food company, said its stores have been preparing for the change since the initial increases.

Wendy's/Arby's declined to provide details about the impact on pricing or jobs.

"Added pressure on labor costs in our restaurants always requires us to consider every option, and we will analyze the effects of this latest minimum wage increase over time," company spokesman Bob Bertini said.