Small Business Owner: An Increased Minimum Wage Hurts Everyone

Small Business Owner: An Increased Minimum Wage Hurts Everyone [Michigan Capitol Confidential]
This would increase the wage by 36 percent for non-tipped employees and 280 percent for tipped employees. 
The magnitude of this increase will have a dramatic impact on the restaurant industry.

I would venture to say few industries, if any, in Michigan are capable of absorbing this percentage increase in costs when labor already represents 30 to 35 percent of every dollar spent by the consumer.
Research indicates that today 1 in 4 restaurants fail in the first year and 60 percent within three years.
That failure rate likely will increase significantly with this proposal.
Furthermore, future investments in this industry will be curtailed as investors/business owners will find more profitable ways to spend their time and capital.
The coalition behind this proposal suggests that this increase be passed on to the consumer in terms of higher prices, and in part be absorbed by the business owner via lower margins. 
What they fail to realize is that the return on investment for the business owners in this industry is only about 3 percent. 
Consequently, further reduction in the margins will make this industry even less attractive for investors/business owners.