For years, restaurant owners have argued that higher minimum wages would mean pricier meals.
Now, restaurants in states that recently raised the minimum wage — including Arizona, California, and Colorado — are putting the proof in customers’ checks.
Surcharges of 3% to 4% to pay for higher labour costs are “the emerging new norm,” a spokesperson for the California Restaurant Association told The Wall Street Journal.
Restaurateurs say that they’re adding the surcharge because increasing prices of individual menu items can convince customers to pick a less expensive option or simply ditch the restaurant all together.
The surcharge also allows restaurants that opposed minimum wage increases to highlight its consequences.
“We want people to understand there is a cost,” David Cohn, the owner of 15 restaurants in San Diego, told The Wall Street Journal. “How do we stay in business with margins shrinking and competition increasing?”
However, many customers don’t typically react well to surcharges — especially if they believe them to be politically motivated. In 2015, a Buffalo Wild Wings franchisee was forced to drop an Obamacare surcharge after angry diners protested the fee.
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