A number of Sacramento restaurants are closing their doors ahead of California’s impending minimum wage increase — and some of the “institutions” have been in business for decades.
What are the details?
On Jan. 1, 2020, California’s minimum wage will rise to $13 per hour for businesses that employ 26 workers or more, and $12 per hour for business with fewer workers. By 2023, minimum wage in the state will be mandated at $15 an hour.
Several restauranteurs in Sacramento have crunched the numbers on how the increased labor costs will impact operations, and have determined they can no longer sustain themselves.
KMAX-TV profiled some of their stories in a report this week.
“California is a rough state to do small business,” Paul Fraga told the outlet. “They want everybody to make $20 an hour, but for the smaller guy, I can’t afford that.”
Fraga owned Perry’s restaurant along Highway 99, a place that — until Sunday — served diners for 30 years. One customer who showed up for her last meal at Perry’s told KMAX, “It’s really sad just thinking about this. It’s an institution. This is a Sacramento institution.”
Another Sacramento station, KXTV-TV, reported last month that the “iconic” Fat City Bar in Sacramento’s historic downtown decided to shut down after 43 years. Owner Jerry Fat told the station it was purely a business decision.
“We’ve had a great ride,” he told KXTV. “But due to the steady decline in Old Sacramento business, coupled with rising costs and increased competition for those shrinking dollars, we made the decision to close.”
Phil Courey owns a Greek restaurant called Opa! Opa! that has operated in Sacramento for 14 years. He told KTXL-TV in November that he would close up shop in mid-December, and wasn’t shy about the fact that the minimum wage hikes were the reason he was throwing in the towel.
“Most of our margins have been consumed by the minimum wage pressures,” Courey said.
But the community begged him to stay open for a little longer, and he agreed, saying he wanted to “take this through the holidays for my staff.”
Opa! Opa! will close Dec. 29. for the last time. Courey told KMAX, “We close our doors one-by-one. Perry’s after 50 years, today Fat City and others…you’ll see a few more closing just after the first of the year.”