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| For Immediate Release |
Contact: Andy Deloney |
| August 3, 2005 |
517/377-3931 |
Restaurateur fears hike's ripple effect
Proposed $2 increase is unaffordable for him and would impact all hourly wages, Arby's owner says.
FARMINGTON HILLS -- Mark Mitra already pays workers above the minimum wage at his four Arby's restaurants in Metro Detroit.
But he's worried that if the state jacks up the bottom wage by $2 an hour, it'll have a ripple effect that would ultimately boost pay by a similar amount for his 75 managers and hourly employees.
"If the minimum wage goes up, it ratchets everybody up, in their minds," said the 49-year-old businessman. "If $5.15 an hour goes to $7.15 an hour, then $7 an hour goes to $9 an hour."
Given the razor-thin profit margins in the fiercely competitive fast-food industry, that would mean trouble for his business, commented the Northville father of two.
"That is an unaffordable proposition for me," Mitra said.
Employee wages and benefits are No. 2 on Mitra's list of business costs, right behind food. He has Arby's restaurants in Farmington Hills, Canton, Van Buren Township and Commerce Township that he has owned for 12 years. He's now scouting locations to open more restaurants.
Andy Deloney, lobbyist for the Michigan Restaurant Association, added that the proposed hike in the tip wage from $2.65 to $4.50 an hour would severely hurt many other restaurateurs in southeast Michigan.
An owner of two restaurants in Oakland County would have to shell out more than another $80,000 in the first year to waiters and waitresses who are already earning $18 to $25 an hour in tips, Deloney said. He cited another owner of six Metro Detroit restaurants who would have to pay an additional $586,000 a year.
"Where will that money come from to pay higher wages to people already making good money in tips?" Deloney said. "That's a very large increase in labor costs."
Founded in 1921, the Michigan Restaurant Association represents more than 4,500 Michigan foodservice establishments. The foodservice industry plays an integral role in Michigan’s economy, employing more than 436,000 people and creating more than $11.3 billion in total annual sales. For more information, call (517) 482-5244.
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