Poll reveals big layoffs after Calif. wage hike

Nation's Restaurant News, April 17, 1989 by Alan Liddle

Poll reveals big layoffs after Calif. wage hike

SAN FRANCISCO -- Nine out of 10 California restaurateurs said in a new survey that they laid off employees following last summer's 27-percent increase in the minimum wage, to $4.25 an hour.

There were 258 respondents to the direct-mail survey conducted on behalf of the California Restaurant Association by Charlton Research of San Francisco, Charlton officials said. In all, they said, 2,300 "mail interviews" had been sent to CRA members.

According to the survey: . Half of the respondents laid off as many as three people, and another 40 percent dismissed as many as 15 workers to offset the remaining employees' higher wages and increases in associated costs, such as workers' compensation and payroll tax. . Thirty percent halted or canceled expansion plans. Fourteen percent said they believed they would have to close a restaurant as a result of the increased minimum wage. . Ninety-five percent raised menu prices as much as 17 percent. . Two-thirds of the operators cut back work hours.

Stanley Kyker, NRA executive vice president, said the study indicated that the wage hike had had "inflationary" and "job loss" impacts on the state.

Kyker suggested the survey's findings might help convince the Industrial Welfare Commission, which has jurisdiction over the minimum wage, that future hikes could be costly in terms of inflation and lost jobs.

CRA officials said the group has 2,600 "member firms" representing 9,000 food-service establishments statewide.