2 ms·

It’s not just cooks, there are many other workers in a restaurant. I don’t think you raise prices 33%. But labor is about 40% of costs. So a 33% change in labo

It’s not just cooks, there are many other workers in a restaurant. I don’t think you raise prices 33%. But labor is about 40% of costs. So a 33% change in labor increases prices quite a bit. And if everyone increases labor costs, then that drives up food and other materials. So you will easily see price increases of 15-25%. If my local Mexican restaurant increases prices by that much, I and many other customers will not go as much. This is super simple Econ101 stuff. Your example is flawed as there’s more than just cooks and there’s not a profit of $1/item.

tayo42 5y ago
My example was with simple numbers to illustrate a point that employee pay isn't directly tied to price of an item or the profit made. Also not every employee is paid the same. Maybe line cooks are getting a raise. Maybe the hostess doesn't expect one. Managers and what ever are already paid more. > a National Restaurant Association publication that said the average restaurant runs about a 29.9 percent labor cost without taxes, benefits and insurance, and about 34 percent with taxes, So your 40% number is way off. Also hourly rate doesn't effect other labor costs