Z Pizza, the $15 Minimum Wage, and What Q13 Fox Didn’t Tell You
In a story headlined “Owner of pizza shop says new Seattle minimum wage law is forcing her to close,” Q13 Fox’s Tina Patel reports that a Capitol Hill franchise of international pizza chain Z Pizza will close in August. Patel quotes franchise owner Ritu Shah Burnham as saying that Seattle’s new $12 minimum wage for employees of companies with over 500 employees is the cause of the closure. “I’ve let one person go since [the wage increase on] April 1, I’ve cut hours since April 1, I’ve taken them myself because I don’t pay myself,” Shah Burnham told Q13 Fox.
A dozen employees work at that particular Z Pizza, and Shah Burnham expressed concern for their future in the current job market. “I absolutely am terrified for them,” she told Q13 Fox. But then things get weird: “I have no idea where they’re going to find jobs, because if I’m cutting hours, I imagine everyone is across the board,” she said. Uh, that’s a hell of a leap for her to make.
Look, I want to be clear: I feel bad for Shah Burnham and her employees. It’s a terrible thing when any business closes its doors. Owners of businesses—be they franchises or independently owned—work hard. They invest their money, their time, and their dreams in their operations, and they have the added responsibility of providing a livelihood for their employees. It’s not easy.
But it’s ludicrous to apply Z Pizza’s particular situation to every single business in Seattle. The context for that location is important. Z Pizza opened five years ago within a block’s walk to the boomingest business corridor in Seattle, the fastest-growing city in America. Within two minutes’ walk, you could buy an enormous New York-style slice at Big Mario’s Pizza or beloved local institution Hot Mama’s Pizza. A little further away, there’s a Dominos Pizza outpost and a Pagliacci Pizza. If you prefer thin-crust, there’s a Via Tribunali nearby. That’s a huge array of pizza choices—every style of pizza but Chicago deep dish (which arguably isn’t even a pizza) served by small businesses, venerable local chains, and even other international corporate pizza chains.
And in my experience, Z Pizza wasn’t offering a very compelling product.
Shortly after they opened five years ago, I visited Z Pizza with a mind toward possibly writing a restaurant review. Although the employee who rang me up and served my slice was incredibly friendly, the pizza was bland—fine, but nothing special—and the atmosphere was less than desirable. It felt like I was sitting in a prefabricated chain restaurant, which, considering the multitude of dining options on Capitol Hill, is fairly inexcusable. (On the same block as Z Pizza, a chain frozen yogurt shop closed before Seattle’s increased minimum wage took effect; spokespeople for the owners of the building told Capitol Hill Seattle they expect a non-franchise frozen yogurt shop to fill that space soon.) I didn’t see any reason to publish a negative review of Z Pizza—why beat up on a well-meaning but mediocre restaurant when there are so many great restaurants out there?—but I also didn’t see any reason to return. I haven’t been back in five years. I guess I’ll never go again.
The Q13 Fox report’s claim that the minimum wage was the only thing that killed this business ignores a whole bunch of relevant questions. Why are other pizza restaurants in in the immediate area thriving? Did they talk to any other local business owners? In the end, it’s impossible to point to one closing franchise restaurant as a symptom of a deeper problem.
The hard truth is that a core demand of business ownership is adjusting to the vagaries of the market. Every business owner has to deal with fluctuating expenses, many of which aren’t announced nearly a full year before they go into effect like the minimum wage was. Something between 60 and 80 percent of all restaurants close within five years of opening. Would Z Pizza thrive if they didn’t have to raise the minimum wage? It’s possible, I guess. Would they make more money if we dropped the minimum wage to the federal minimum of $7.25 or the tipped employee minimum of $2.13? Of course. But we need to make sure that our lowest-earning workers can afford to live in the city they work in, and the minimum wage is the best way we have to do that.
As to Shah Burnham’s claims that she’s “terrified” her employees will have a hard time finding work, she can rest easy: Working Washington yesterday published a list of 14 Seattle-area pizza places that posted job openings to Craigslist last week alone. Z Pizza’s employees, if they want to stay in the same field, will likely be able to find work fairly easily. In fact, they’ll soon be paid even better in their new jobs. And if they want to try to investigate other kinds of work, the Seattle metropolitan area’s unemployment rate currently stands at 4.6 percent, well below the national average. Now is a pretty good time for her employees to consider their options. I wish them the best of luck as they move on to bigger and better things.
UPDATE 9:52 am: As a little postscript to the story, here’s another important piece of data that disproves Q13 Fox’s narrative: over at Barry Ritholz’s Big Picture blog, incredible Twitter user @TBPInvictus points out that food service business licenses in Seattle have increased since the minimum wage increase at the beginning of this month.
UPDATE 10:20 am:
Our new hero @TBPInvictus did a little, you know, actual journalism and contacted the owner of Hot Mama’s Pizza about the minimum wage increase:
— Invictus (@TBPInvictus) April 30, 2015