The shocking state of the restaurant industry: 'We can't afford to be open. We can't afford to be closed.'

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The industry is facing a crisis as new legislation, inflation, higher wages and pandemic fallout have chefs and owners worried for the future of mom-and-pop restaurants.

In October, Lauren and Peter Lemos locked the doors of their Chinatown sandwich shop for what they thought would be the last time. In late March they flipped Wax Paper’s lights back on — not due to newfound success or a windfall but because they couldn’t afford to shut down. “After closing Chinatown we realized we still have our lease, we still have our loans from the SBA, from COVID, the bills are still coming in,” Lauren Lemos said. “We can't even afford to close.

Some of the most vocal concerns from the industry arrived with AB 1228: On April 1 the new California law increased minimum wage for fast-food chain workers by nearly 25%, bumping hourly pay to $20 for restaurant locations with more than 60 outposts in the U.S. and affecting an estimated half-million workers. According to the U.S. Bureau of Labor Statistics, roughly 200,000 of them are employed in L.A. and Orange counties alone.

 

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