ABQ minimum wage increase affecting restaurant owners

Posted at: 02/04/2013 10:22 PM
By: Maria Guerrero, KOB Eyewitness News 4

Albuquerque restaurant owners say the first month of the city’s increased minimum wage has hit them hard.

It’s not necessarily the increase to $8.50 an hour they’re concerned with, it’s what their highest paid employees are now making.

Route 66 Malt Shoppe is Eric Szeman’s American success story; a success he feels is already being threatened by Albuquerque’s minimum wage increase.

In place since January, non-tipped workers are now paid at least $8.50 an hour, servers are now paid at least $3.83 an hour plus tips.

It’s making a big difference for many of them; Szeman said it’s making a difference for him too, but in a bad way.

"They gave the biggest raise almost double to the people that already make the most money," exclaimed Szeman.

Szeman said he hasn’t let go of any of his 12 employees, but he isn’t able to expand. He said he’s not even accepting job applications anymore. So he’s taking his fight to the city council, and he’s not alone.

The New Mexico Restaurant Association and a handful of other longtime Albuquerque restaurant owners want the council to roll back the server wage. "Our servers are getting an increase of 79% this year and over two years it'll be 139% increase in their wage," said one restaurant owner. “Last month alone we cut 800 hours, man hours in just trying to keep things afloat," said Rudy Guerrero, owner of Papa Felipe’s Mexican Restaurant.

The city of Albuquerque’s assistant city attorney said if a business filed a lawsuit, a judge could rule the wage increase unconstitutional. The council could also vote to replace the wage increase.

When asked whether council president Dan Lewis would consider that he replied, "We're not in a position right now, absolutely not to overturn what the voters did a few months ago. But certainly we want to know what the effects are.”

For Szeman, it’s simple math.

"If we barely make $3,600 in payroll every two weeks, how are we going to make $6,000," he asked.

The New Mexico Restaurant Association told the city council they know of at least four restaurants that have closed because of the minimum wage increase, but would not say which businesses.