Are New & Higher Minimum Wages Causing Restaurant Bankruptcies?

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Nice piece by Danny Klein pointing to the complexities that the new minimum wages have caused for some restaurants, discussing the recent bankruptcy of Restaurants Unlimited.

"Over the past several years, certain changes to wage laws in the debtors' primary geographic locations coupled with two expansion decisions that utilized cash flow from operations resulted in increased use of cash flow from operations and borrowings and restricted liquidity," filings said.

"These challenges coupled with additional state-mandates that will result in an additional extraordinary wage hike in [fiscal year] 2020 in certain locations before all further wage increases are subject to increases in the CPI and the general national trend away from casual dining, led to the need to commence these chapter 11 cases."

This is a more general complaint and we will likely see even more technology replace these lost jobs.

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This page contains a single entry by Michael Webster published on July 9, 2019 10:20 AM.

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