Reader JP says that some restaurants in San Diego starting adding a surcharge to cover the January 1st minimum wage increase and wonders if this is happening locally:

Hi John,

Being originally from San Diego ages ago I still follow news & sports there.  I ran across this article in the San Diego Union-Tribune today and thought you might like to see if this is starting to happen in Santa Barbara?  If so, even the new surcharge, I feel it should be big news as most diners will never know especially if an establishment is not “above board” on the issue like detailed in San Diego.


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8 Responses to QUESTION OF THE DAY

  1. Jonathan Savell says:

    It’s an excuse for hidden charges. Most San Francisco restaurants put in a 4% surcharge for the SF health plan years ago and keep charging it, never absorbing the costs into their food prices. On a recent flight the fare was $700 with a $600 fuel surcharge, even though gas prices are low. We should deduct the surcharge amount from our tips, figuring that all the surcharge money should be going to the employees.

    • Travis says:

      That last statement is a false assumption. The surcharge is going towards the employer to cover the wage increase overhead.

      Tips are offered in excess of wage, presumably for good service (at least in CA, while in some states it is an expectation due to the fact that servers are paid less than minimum wage).
      If you deduct 4% from a server’s tip to fight the “injustice” being rendered, you’re only affecting the server’s net income, not the surcharge. Also note that the surcharge is theoretically being used to cover all employees (cooks, busboys, servers, etc), not just the sever. So to reduce the server’s tip by the same amount with be an unfair distribution.

      That being said, I do disagree with the surcharge as a general practice. They should just build it into their prices, otherwise it is falsifying inflation. And at what point does it stop? In 10 years, when minimum wage increase by 50%, does the surcharge percentage keep growing while the cost of Pizza remains $10?

  2. Christine says:

    “The message on the menu will read “As we support the new minimum wage and other mandates, the 4 percent surcharge allows us to continue to provide you the hospitality and quality of food you have come to enjoy,” Ladeki said.”

    Oh my goodness. Wage raises have always happened in history. This is nothing short of a tantrum from restaurant owners. Raise prices by 4% and don’t say anything. It’s what business owners always do when costs go up. My dinner costing 4% more is not going to stop me from going out to eat, but this sort of political pandering posted on menus sure will! Economics 101, people. If you own a business and don’t know how to reprice after your costs go up, you should get out of business. Seriously.

  3. Lily says:

    I agree with the general sentiments here. When will we see a surcharge on increase in food cost, rent, utility, insurance, general maintenance, printing of the menu, etc? The list is endless and should all be filed under overhead expense and the menu price adjusted accordingly just like every other increase in overhead expense that happens multiple times a year, but aren’t passively aggressively announced to the patrons. Another thing that gets on my nerves is that customers are increasingly expected to tip at order at the counter and clean up after yourself type restaurants. Owners can pay runners minimum wage and shame customers into paying a tip for nonexistent service.

  4. Hefe says:

    This cost increase affects everyone so no one is at a competive disadvatage. Rents go up, food costs increase, utilties, supplies etc. Based on this 4% number a $10 ticket goes to $10.40. If we really want to see labor costs skyrocket build a wall.

    • Jon True says:

      The problem with labor costs and rising restaurant prices is the minimum wage paid to undocumented workers. The hourly wage for most jobs in Mexico is $2.00 or less. Employers should be allowed to hire undocumented aliens and pay them whatever wage they will accept. Whatever it is it will be a lot more than what they could earn back home.

      • Mike says:

        What is the point of a minimum wage law, if Employers are allowed to hire undocumented workers, and pay them what ever the feel like.

        • Jon True says:

          Some restaurant jobs are jobs that very few want and are hard to fill at the standard minimum wage. That’s why restaurant owners have to rely on undocumented or phony documented workers. There should be a hierarchy in the minimum wage law. By that I mean certain restaurant jobs could be offered and filled, for example, at $7.00 and hour. Some who need work would take a job that pays that little. If not enough did then the employer would have to offer more.

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