Ethan Stowell Restaurants predicts $17 hamburgers and a halt to new restaurants… then opens 3 new restaurants in next year, realizing “ultimately it’s really good for the industry”.

Angela & Ethan Stowell own a medium-sized chain of well-regarded Seattle restaurants. They repeatedly predicted grave consequences would fall upon Seattle restaurants if the minimum wage rose to $15/hour.

What they said

  • 3/19/2014: "Ethan Stowell, who runs nine restaurants in Seattle neighborhoods, said his group was predicting a 25 percent price increase. “It would cost us $1.6 million to $1.8 million a year,” Stowell said about the $15 minimum wage. “If anybody thinks that’s fluff, something we can just absorb, then they don’t know my business.”"
  • 6/4/2014: “Then there’s Angela and Ethan Stowell, who employ about 225 people in 10 neighborhood restaurants around Seattle. They were negotiating to open two more, but they've put those plans on hold: Now we are having to draw back and say: Well, can we actually do that? Should we be signing leases and proceeding with development?”
  • 6/10/2014: “Local, independent restaurants and retailers will be the ones who are really going to struggle and some will go out of business.”
  • 8/8/2014: “I think in five years we will be the city of the $17 hamburger.”

What happened

After the first minimum wage increase took effect this April, Ethan Stowell Restaurants announced plans to open three new restaurants — all in Seattle — in the year ahead. In fairness, by May 2015, Stowell executives have changed their tune on the impact of the $15 wage:

In the end, I don’t think a lot of restaurants will lose a lot of business from the new minimum wage. Ultimately it’s really good for the industry and I think everyone is going to settle down and the average customer is going to keep going out to eat like they always have. It’s a bit of a storm for a little while, but I think people like to go out to dinner and ultimately restaurants and employers and employees will figure out a way that works well for everyone.

As for that whole thing about a $17 hamburger in 5 years that people still love to cite? It’s less powerful if you know that back when they said that in 2014, they were already charging $16 for a hamburger. Works out to less than 1.5% hamburger inflation per year.