Terra Plata (Image: CHS)
Seattle’s long march to a $15 an hour minimum wage included its biggest jump yet to start 2020.
One Capitol Hill restaurant owner and Seattle business leader says the milestone means it is time for the city to rethink how it treats tips and wages.
Linda Di Lello Morton, co-owner of Terra Plata and president of the Seattle Restaurant Alliance, says increasing costs are eating up her profits at the Melrose Market restaurant and is calling for a tip credit to help the city’s restaurant industry survive, KING reports.
“It’s going to be a challenge for sure, and the problem is more than just minimum wage,” Morton told the TV station about the 2020 minimum increase. “There’s a lot of other increases, there’s other legislation that’s passed that have increased our costs, rents are going up, triple nets are higher than they’ve ever been, property taxes are going up. That affects our bottom line.”
UPDATE 10:25 AM: Jacque Coe, communications for the Seattle Restaurant Alliance, tells CHS that the organization has no official position on a tip credit at this time. Morton did not respond to CHS’s inquiries.
The Seattle Restaurant Alliance leadership includes Travis Rosenthal of Rumba and Jasmine Donovan of Dick’s Drive-ins.
Starting with 2015, the annual increases in Seattle’s minimum wage have been made in 50-cent increments every January 1st. This year, however, the minimum jumped up by $1.50, to $13.50 per hour for employers with fewer than 500 employees where benefits are offered or the workers can earn tips. 2021 will bring a second $1.50 bump for this group of employers to $15. Ostensibly, that would be the end of a credit for tips. Every business will be required to pay a minimum of $15 an hour.
Some business owners say that might be the breaking point and are calling for legislation that would institute a permanent tip credit to help soften the impact. Business proponents have argued for a “tip credit” that would count things like tips, bonuses, commissions, or profit sharing towards a minimum wage from the start of the $15 push. In 2011, CHS reported on a business group’s proposal for a new $11 minimum wage that included tip credits.
Tamara Murphy and Morton debuted Terra Plata in the Melrose Market in 2011. The market’s other signature restaurant, Sitka and Spruce, closed to end 2019 as award winning chef Matt Dillon said the costs of doing business including wages and rent and real estate costs in Seattle were too great to make his type of restaurant economically sustainable.
CORRECTION: When first posted, this article stated that Seattle Restaurant Alliance members supported tip credit legislation. The organization does not currently have an official position on a tip credit, a spokesperson tells CHS.
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How about we get rid of tips? Tipping is racist and should have been axed a long time ago.
Yeah. Both me and my husband are from countries where tipping doesn’t happen and it takes a while to get used to doing it. With tax and tipping adding 30% to a meal’s cost we just eat out much, much less often.
Absolutely agree! Tipping protects business owners for their bad business model while punishing their workers. Just charge what it costs to provide a living wage for all of your employees. And if you can’t make it work, get a new business model. Or just close. The tipping model is antiquated and should be eliminated all together.
How does it”punish” employees. I make substantially less now as a bartender than I did just a few years ago. It’s a result of the service charge that was added to people’s tabs. They just don’t tip anymore. Now I make the exact same as the shitty bartenders. No reason to excel at my trade, it doesn’t bring more money.
Speaking of business model, which model in the restaurant/bar business outside of traditional tipping has increased the wages of employees?
This $15 an hour thing has been a debacle for our industry. Less hours, less money, lost jobs. It’s just the plain truth. I never should have supported it.
How is tipping racist?
Ugh. You had to ask.
i wonder if these people ever consider that there just isn’t a demand for their product/service? instead, they blame the minimum wage increases. I run a business here, too. And you know how we dealt with the minimum wage increase? passed the cost on to the customers. if your product or service is something people want, they will keep paying for it. And now they want to go backward to an $11/hr wage? GTFO!
THANK YOU! I wish more business owners would look in the mirror and realize it’s their business model that’s wrong, not living wages.
push back against triple net not hourly workers –
Push back against spiraling costs, such as dramatically increasing property taxes and other government controlled costs. Triple nets are not the problem. It is the costs contained therein, which includes property taxes, and those costs have been driven higher by government action.
Commercial rents in Seattle have risen annually much more slowly on average than have property taxes. The school funding “solution” pushed property taxes through the roof, raising triple net costs, and commercial tenants are feeling it. That was a government action. The minimum wage increases for tipped employees has also raised their costs. Again, the result of government action.
This is not about commercial landlords screwing their tenants. It is about government decisions made without regard to detrimental impacts to commercial tenants.
well, honestly the real solution then is we shift from the regressive tax model in this state and move toward income tax
The school funding measure and the minimum wage increase had broad public support. The school levy won by a landslide. They weren’t impulsive decisions handed down by the government. They were democratic actions responding to the people. If somebody can’t run a business in that environment, well, they’re in the wrong place.
oliveoyl is absolutely correct! We need a marginalized income tax, like the federal income tax, capital gains taxes and a corporate tax that replaces the convoluted B&O Taxes, combined with both property and sales tax relief, maybe even get rid of the sales tax all together.
The problem Seattle has is that half of the population rent, so don’t directly feel the pain of the never ending property tax grab.
The problem Seattle has is that half of the population rent, so don’t directly feel the pain of the never ending property tax grab.
Washington State property tax rates are actually pretty low (<1%) and constitutionally capped at 1%, with rare, complicated cases where it's can poke above 1%. I believe we are just below the median in the country (26th of 50th). There are even quite a few dark red states that have much higher rates than us.
Also, whenever I see a comment like yours, I wonder who these alleged, benevolent landlords are that don't pass property tax increases along to renters.
If I were to guess, you're just Dori Monson in disguise, using scare tactics to convince people to not properly fund their City.
Jonc, the school funding issue was very complicated. The levy vote was just the final part. The legislature did much work prior to the levy vote to shift tax burdens from rural to urban areas, as the Republican legislators wanted, and Seattle received a very large property tax increase as a result. This was compounded by the levy vote.
But my point was directed Oliveoil’s comment directing us to push back on triple nets. Those triple net costs rose dramatically along with property taxes. The solution is not to shift the costs to commercial landlords through commercial rent control. We need to recognize that having nice things (highly paid teachers, for example) costs money, and securing that money may adversely effect those who have to pay it. In this case, those paying it are local businesses who are struggling to make it work.
Property tax is 1% of an ever rising assessed value which in most cases has doubled over 10 years. So what was $6k is now $12-15k or about 20% of my take home income. You missed the part about housing values driving the increases possibly because you don’t own a property…
No, it is not time for a tip credit. These just dilute the purpose of a good wage. Servers work hard and make my experience at a restaurant great! People who suggest a revival of tip credits don’t understand the possibility of fraud that will happen when overzealous owners flout the law!
There will come a day when people are just not able to eat out. I love how the commenters on this website think they know what it’s like to run a restaurant. Walk in their shoes and you will find how difficult it is. Honestly, it’s depressing to read this blog. People in this area are so hostile, angry, irrational and nasty.
Nobody has a right to eat out at a restaurant made affordable on the backs of workers who can’t pay their rent. If the industry cannot come up with a business model that doesn’t include poverty wages then it shouldn’t exist. Period. And I have run a restaurant before.
The majority (70%) of tipped workers in America are women, who often have to endure sexual harassment because they don’t want to jeopardize their tip income.
https://www.nytimes.com/2018/03/18/business/restaurant-harassment-tipping.html
Instead of giving restaurant owners tip credits to avoid paying living wages, we should be working towards eliminating tipping entirely.
Rising housing costs for restaurant workers is a bigger strain on restaurants than the minimum wage
https://www.seattletimes.com/life/food-drink/seattles-booming-restaurant-scene-shows-signs-of-slowing/
Time to eliminate tipping.
Any other type of business in Seattle doesn’t rely on paying their employees below minimum wages.
I read somewhere that Seattle needs to build 120,000 houses/apartments/condos. I am not surprised if businesses are suffering the same squeeze.
The whole culture around tipping is awful, the butt-kissing routine is demeaning for both workers and customers. A handful of restaurants have already gotten rid of it, and it’s a big plus in my book.
The Effing Marxists who have never accomplished anything in their lives on these posts make me want to puke. So stupid they can’t see beyond their own noses. Oh well…I guess this is the new reality of Seattle.
Even if you have “accomplished anything” in your life, you should see beyond your own nose and believe it is good to have a system that can provide for the poor and the less fortunate.
Oh right, because Socialism/Marxism has been so successful everywhere its tried. LOL. The one thing it provides for the poor is more poor people. The people in government are the ones who take all the wealth and they take care of their loyal friends. There’s a reason Socialist governments become dictatorships. Its the only way to keep their power. Ever notice how people are running away from these countries to get into the US? They don’t want more Socialism, they want less. Okay, go ahead and make your comments about Bezos, and other Billionaires. Blah blah blah.
Are you against Medicaid then? Government also hands out $1 trillion a year to the military industrial complex. But you probably don’t have a problem funding those “entitlements”.
I agree with you on the Military Industrial Complex. Its absurd. Medicaid is one program. The Marxists in this City and across the US want full government take over of housing and any industry they can get their hands on. All about power and control of people in my opinion.