Boss Calls Increases Counterproductive Arby’s Owner Says Higher Wages Could Sink Restaurant And Its Jobs

For Dan Mattison, upping the minimum wage is as palatable as cold french fries.

The owner of Arby’s restaurant on Appleway believes an increase would send his labor costs skyrocketing. That would cause him to raise his prices. That would make him less competitive. And that could sink his restaurant.

Where would his workers be then?

“We don’t make a killing in this business like some people think,” Mattison said. “In fast food you operate on a very tight margin of profit. We track the pennies and let the dollars take care of themselves.”

Mattison, a former California landscaper, bought his restaurant six years ago and now has nearly 40 workers.

Full-time managers make $25,000 to $40,000 a year, he said. But most workers are cooks and cashiers, who start at $4.50 an hour - 25 cents above minimum wage. After 90 days, most are bumped to $5.

“I’d love to pay my employees more,” Mattison said, “but if I could, I’d be doing it already.”

Consider the math.

If each employee earned an additional 50 cents an hour, that could cost him $400 a week. That’s almost $21,000 a year - a big chunk of Mattison’s annual profit.

A small price to pay for a man who owns a Mercedes and is rarely seen without a cell phone?

It’s not that simple, Mattison said. Take last year.

Increased food costs, among other things, gave Mattison his worst year ever. He made no profit.

Yet he still paid thousands of dollars in royalties to Arby’s and the corporation required him to pay for advertising.

“I’d be broke if I hadn’t been saving,” Mattison said.

Then there’s Coeur d’Alene’s boom in new restaurants.

“Business already is down for everybody around town,” he said.

If fast-food restaurants bumped up prices to recoup the cost of higher wages, Mattison said, consumers would turn to other restaurants. Since those restaurants’ labor costs include waiters and waitresses - who earn their living mostly from tips, not wages - their costs would not rise as much. Waiters and waitresses can be paid less than minimum wage, because their tips also count as income.

“Suddenly you’re living on the edge,” Mattison said. “If you have a bad year and your costs are in line, you’re OK. If it’s a really bad year and they’re not, you’re in trouble.”

, DataTimes ILLUSTRATION: Photo