Some diners are furious about a pricing strategy that is becoming the 'new norm' at restaurants in states that raised the minimum wage

pulse

March 9, 2017 4:54 PM

Surcharges of 3% to 4% to pay for higher labor costs are "the emerging new norm" in states raising the minimum wage.

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For years, restaurant owners have argued that a higher minimum wage means pricier meals.

Now some 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 labor costs are "the emerging new norm," a spokeswoman for the California Restaurant Association told The Wall Street Journal.

Restaurateurs say they're adding the surcharge because the alternative of increasing the prices of individual menu items can cause customers to pick a less expensive option or simply ditch the restaurant altogether.

The surcharge also allows restaurants that opposed minimum-wage increases to highlight the consequences.

"We want people to understand there is a cost," David Cohn, the owner of 15 restaurants in San Diego, told The Journal. "How do we stay in business with margins shrinking and competition increasing?"

But many customers don't react well to surcharges — especially if they believe them to be politically motivated. In 2015, a Buffalo Wild Wings franchisee dropped a surcharge related to the Affordable Care Act after angry diners protested the fee.

People have used social media to protest the rise of surcharges.

In February, the W Seattle hotel dropped its minimum-wage surcharge after a tweet complaining about it went viral.

"Rather than just raising prices naturally, these restaurant managers are making an overtly political statement when they add minimum wage surcharges to their menus," Paul Constant wrote in the Seattle-based blog Civic Skunk Works in February. "They are protesting the fact that they have to pay their workers a living wage."

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