Celebrity chef Mario Batali knows a thing or two about running a restaurant, both in the kitchen and on the business-side. So during a recent conference when he was discussing the automation of restaurants, the restauranteur spoke candidly about the consequences of a higher minimum wage.
What did he say?
- "I understand why restaurant automation exists. Because as we raise all of the costs of the staffing...I mean, minimum wage is a great idea, raising it to a high number is a very fascinating way at enriching the basic populous."
- "But at the end of the day if you raise one of these physical costs to a smaller operator, you must realize that's gonna effect the bottom like, meaning the prices are gonna have to go up."
- "Everyone champions all of these great things and all of these social movements, but they are preying on a business that already has thin margins."
"It’s an odd thing that minimum wage as effective as it might be to augmenting the general lifestyle of a lot of people, it’s not the fastest way of advancing a higher quality of life."
Batali doubles down
When BuzzFeed questioned Batali over his claims, he doubled down by explaining that a higher minimum wage forces businesses to increase costs, which turns customers away and hurts the bottom line of restaurants — almost all of which are small businesses.
He added that some restaurateur friends of his in San Francisco, which has voted through a number of minimum wage increases and now mandates $15 an hour, have closed their restaurants after their margins shrank from 10% to 3% or 0%.
"It's a very difficult thing for restaurateurs," Batali said.
Indeed, for cities like San Francisco that have passed a law raising the minimum wage to $15/hour, restaurants are having a very tough time keeping their doors open, a Harvard Business School study discovered earlier this year.
Higher minimum wage also decreased the number of new restaurants that opened, the study found.
Watch Batali's comments below. The relevant portion begins around 8:00: