Seattle’s new $20 minimum wage claims 6th restaurant casualty since New Year

Pike Place Market bakery The Confectional closed on Sunday after 18 years in business.

Owner Destiny Sund told KIRO News Radio, “I wanted my team to have a wonderful holiday season, so I didn’t mention to them that we would be closing until after New Year’s Day. So this has been a long week for all of us at The Confectional.”

The minimum wage for all employees in the city limits, regardless of business size, jumped to $20.76 on January 1. Last year, if a worker earned at least $2.72 per hour in medical benefits or tips, the business only had to pay its employees $17.25 per hour, but now, for those businesses that featured tips, the change to the minimum wage was a 20 percent increase. The Emerald City's increase is $4 more than Washington State’s minimum wage requirement.

Sund added, “That allowed businesses 50 employees or under to subtract $2.00 from the minimum wage. If they could make it up in tips and or benefits. And my employees did make that up in tips.”

She continued, “And just doing the math with the additional increase and the loss of the tip credit, it would cost my business an additional $18,000. And that’s just not sustainable.”

At least five other restaurants in Seattle have closed or are closing just days after the city council’s new minimum wage law went into effect.

Last week, the owner of the Bel Gatto bakery in West Seattle posted a sign on its door announcing that they were closing, saying, “Our revenues, unfortunately, are not able to cover the close to 20% increase in mandated wages, salaries and payroll taxes put into effect by the Seattle City Council effective 1/1/25. This ruling has made continuation of our bakery operations untenable.”

Jackson’s Catfish Corner, which has served Seattle’s Central District for 40 years, closed last week, with owner Terrell Jackson saying in an Instagram video announcing the closure, “I just cannot do it anymore. I’m maxxed out, y’all.”

He specifically cited the minimum wage hike, declining foot traffic, and the overall rising cost of doing business in Seattle. “I know that the minimum wage went up to 20 bucks an hour… I know that’s hard for my business as a small black business. I’m not Amazon or Walgreens or Walmart who can pay their employees that much.”

The owners of The Jilted Siren in Capitol Hill said the council’s new minimum wage forced them out of business and they were hoping to re-open somewhere else.

Plum Bistro, a family-owned business that has served the neighborhood for 20 years, shuttered and closed both Plum Bistro and Plum Chopped, their smaller lunch and salad satellite restaurant next door.

On Jan 1, Bebop Waffle Shop, which has been open for over a decade, closed its doors for good, citing the new minimum wage law. Owner Corina Luckenbach told Fox 13, “This is financially just not going to make sense anymore. Because, just for me, the increase would cost me $32,000 more a year.”

President and CEO of the Washington Hospitality Association Anthony Anton told The Seattle Times that the situation “It’s just not sustainable,” and predicted that the number of restaurants in the Emerald City will drop by between 5 and 8 percent this year.

The trend is following a similar pattern as California, which in April 2024 enacted California Democratic Governor Gavin Newsom's $20 minimum wage. Thousands of jobs have been lost in the state's restaurant industry while businesses have been forced to cut hours and increase prices to survive the costly wage increase that has resulted in mass layoffs.

Shake Shack closed six of its California locations due to the minimum wage increase, while other franchises, including McDonald's, Burger King, Starbucks, and In-N-Out Burger, had to raise prices to cover costs. Many of the franchises were forced to reduce employee hours, and others transitioned to automation.