As someone who loves to eat out in our city, I’ve been thrilled to support minimum wage increases that would most certainly stimulate Berkeley’s restaurant ecosystem. Over more than 34 years, and possibly ingesting billions of calories, I’ve enjoyed the diversity of Berkeley’s restaurants more than many people.
You can’t swing a cat without hitting a new restaurant in Berkeley, so I thought I would try my hand at amateur data journalism to get a deeper look at how increasing the minimum wage correlates with Berkeley restaurant openings and closings.
I went through each of Berkeleyside’s monthly restaurant openings and closings articles, and tallied the numbers reported. I also scanned the comments to look for any openings or closings Berkeleyside might have missed. And, looking at the data, we find a strong correlation between increasing minimum wages, and the number of restaurants opening in the city.
Based on my armchair analysis, I was stunned to find that, since minimum wage increases in 2016, cumulative restaurant openings have exceeded closings by more than a 2:1 ratio! Even more important than the raw numbers, the slope of the line for restaurant openings (5.5) was more than twice that of restaurant closings (2.65).
I’m not making any grand claims based on this data, except that there is a strong correlation between increasing the minimum wage, and restaurant optimism and openings by savvy, successful restaurateurs. Of course, the data, or my analysis could be inaccurate; it’s based on Berkeleyside’s reporting which, though earnest, is not official nor comprehensive. Also, there could be negative impacts not revealed in openings and closing. Finally, I’m not a data scientist, I just play one on the Internet. But, if increasing the minimum wage is harming restaurants in Berkeley, it’s not reflected in this data.
So why the all the noise every time there’s a minimum wage increase? The first cries on Berkeleyside came in 2013 when the founders of the Berkeley Restaurant Alliance claimed that “In the long run [increasing the minimum wage] will be pushing out opportunity as it financially squeezes small business, which will be replaced by corporate chains.”
In 2015 a small minority complained that a minimum wage would “close the Elmwood,” and that “if the proposal by the labor commission goes through, I can tell you the Telegraph Avenue district would be decimated.” In fact, Telegraph is hopping with Raleighs and Mezzo back in action, and new restaurants like Gordito and Super Duper. Elmwood is thriving with many new restaurants like The Wood, Baker and Commons, The Italian Homemade Company, Organic Greens and Burger Joint.
When it comes to predicting doom due to wage increases, it’s unsurprising that incompetent restaurateurs repeatedly get it wrong. Their failing restaurants already suggest they lack the business acumen to make a successful go of it. Due to this lack of business skills, it might seem like outside factors are causing their restaurant failures, when, in fact, owners are blind to their own incompetence, relative to the many successes in Berkeley. In fact, a recent Harvard study, Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit, confirms my thesis: that increasing the minimum wage can kill businesses if they already suck.
Now, once again in 2018, we’re hearing that a higher minimum wage would be “an unfair burden for small, independent businesses.” Hogwash. Every time there’s an increase of minimum wage, we hear the same diatribe, and in fact, with each minimum wage increase in Berkeley, the exact opposite has happened.
It’s time to ignore these complaints about increasing the minimum wage in the face of actual data. If you’re a restaurant owner, the data suggests restaurants in Berkeley are thriving under minimum wage increases, and there is always opportunity for business-minded restaurateurs.
As for me, I’m delighted that raising the minimum wage has had the predicted effect: more restaurants, more jobs, higher wages, and of course, more calories! Instead of blaming others for their failures, a majority of restaurant owners have been hardworking and capable enough to seize the day of the economic growth stimulated by minimum wage increases in Berkeley. Now, I think I’m going to hop down to The Bird on Telegraph for one of their chicken sandwiches… assuming the line isn’t too long!