As consumers, we’re spending less on food than any other time in history, and the restaurants we love need us to help rebalance. It’s time for us to show our support by pledging to EatTheCost of an overdue raise for their teams.
San Francisco, CA (PRWEB) October 15, 2016
Local restaurants nationwide already face rising real estate costs and competition from chains and online businesses. Now, labor costs are increasing with overtime regulation going into effect December 1st (https://www.dol.gov/featured/overtime) and minimum wage reform on city, state and federal ballots.
Homebase, a trusted provider of essential tools for the hourly economy, polled some of its 50,000 local business customers and found that even facing a steep rise in costs, only 59 percent think they’ll raise prices to cover.
“As consumers, we’re spending less on food than any other time in history (goo.gl/M5oQAL), and the restaurants we love need us to help rebalance. It’s time for us to show our support by pledging to EatTheCost of an overdue raise for their teams,” said John Waldmann, CEO and founder of Homebase. “These businesses are already operating with typically less than 5 percent profit margin and don’t have much left to squeeze. Let’s eat the cost so the businesses that make our days better will be part of our future.”
What Is the Cost? The National Numbers
Based on currently monthly spending on dining out (http://www.bls.gov/regions/subjects/consumer-spending.htm) and Homebase's own payroll data across 50,000 businesses, if the average American spent $15 more each month eating out, small businesses could raise the minimum wage to $12, giving raises to 80 percent of their hourly workers—about $0.50 a day. A dollar (an average increase of $33 spent dining out each month) would cover an increase to $15/hr, while allowing local businesses to stay open. That wage increase would benefit a full 95 percent of the hourly workforce.
What the cost looks like varies dramatically by city. Those that have stuck to the federal minimum wage of $7.25 will face the biggest cliff in consumer costs, while others have made city-level changes over the years and will barely notice the change. The attached chart shows the current monthly cost of dining per person in each city, and what more each person would need to pay per month to cover a wage hike to $12 or $15/hr.
Oh. But if diners don’t pay more at the bar, the counter and the table, based on current average profit margins and labor costs across small businesses, a wage hike to $12 would put 40 percent of local businesses at risk of closing, and $15 would endanger 86 percent!
The question is - hot on the heels of recent positive Census data on the middle class (https://www.americanprogress.org/issues/economy/news/2016/09/13/144045/new-census-data-show-middle-class-incomes-rising-but-more-work-to-be-done/) - will these markets bear it? Diners can weigh-in directly at http://www.eatthecost.com. People are invited to pledge to spend just a bit more each month to show support for their local businesses. They can share pictures of themselves enjoying the spoils on social media, and are encouraged to let their local businesses know directly that they’re with them, even if it means costs will go up.
“We want local businesses to know that we would rather pay more than see them disappear. The local businesses that make our neighborhoods and cities unique - and the servers, bartenders, and others that make them great - deserve to know we’re there for them,” continued Waldmann. “Eating out is a treat for many people and families already, and the impact of a price increase should not be understated. But changes like this don’t happen overnight, so everyone - diners, owners and employees - will have time to adjust. And dining costs are progressive, so those with more will spend more.”
Homebase is uniquely positioned to partner with its customers - both the businesses and the people they employ - to help them navigate these changes. Its free scheduling, time sheets, compliance and team communication tools already transform painful, often paper-based tasks to simple Web and mobile moments. The average customer saves 5 hours a week when they switch to Homebase.
About Homebase (http://www.joinhomebase.com)
Homebase makes hourly work easier for the whole team. With free online tools and mobile apps for managers and employees, Homebase eliminates the paperwork and headaches of scheduling, payroll, and team communication. Based in San Francisco, Calif., Homebase is made up of former baristas, small business owners, waiters – and even the former head of HR from a national chain restaurant – who have gone on to build products at some of local businesses’ most trusted brands, including Intuit, OpenTable, and Yelp. Homebase is backed by Baseline Ventures, Cowboy Ventures, Khosla Ventures and others who know local business and have helped great companies scale, including Instagram, Square, and Yelp.