Sacramento Restaurants Closing Due To Imminent Minimum Wage Increase

SACRAMENTO (CBS13) — With California's minimum wage set to increase on January 1, restaurants facing high rent and staffing costs said it's a price they can't afford, which is forcing some to close their doors.

"It's bittersweet. It's been 14 years. It's been a good run," said Phil Courey, the owner of Opa! Opa! Greek restaurant in East Sacramento.

Courey has been at his location on J street since 2006 and was set to close on Sunday until the community stepped in and begged him on social media to stay open.

"We had a couple thousand comments or responses and I wanted to take this through the holidays for my staff," Courey said.

Opa! Opa! will now remain open until December 29.

The minimum wage increase, which will hit $13 per hour, applies to businesses with 26 or more workers. Employers with fewer than 26 workers will have to pay a minimum wage of $12 per hour.

When considering his operating costs, Courey said it is just unsustainable.

"The wages are definitely a heavy pressure on us," he said. "About 40 grand a year every time they jack up the minimum wage."

Meanwhile, another popular Sacramento restaurant closed under pressure.

In South Sacramento, Perry's restaurant along Highway 99 served their final meals on Sunday. Some customers who lined up for the last meal were dismayed.

"It's really sad just thinking about this," Patricia Smith said. "It's an institution. This is a Sacramento institution."

For years, Perry's was the go-to place for cops, truckers and customers looking for late-night eats. Paul Fraga bought the business from the original owner 10 years ago.

"California is a rough state to do small business," Fraga said. "They want everybody to make $20 an hour, but for the smaller guy, I can't afford that."

It's the fourth straight year the minimum wage has been increased and it's expected to jump to $15 by 2023.

Courey said the increases are hurting mom and pop restaurants.

"We close our doors one-by-one, Perry's after 50 years, today Fat City and others...you'll see a few more closing just after the first of the year," he said.