This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will higher minimum wages hurt or help these restaurant and hotel stocks?

Stocks in this article: BOBE DRI IHG MAR SBUX

James Dennin, Kapitall: Seattle and Maryland raised their minimum wages. Could these restaurant and hotel stocks get a boost? 

President Obama and the Democratic congress have been eager to leverage t he overwhelming popularity of a minimum wage increase, which could be as high as 70%. That effort has stalled, however, and so the battle is shifting to the local level.  

Over the weekend Maryland and Seattle executives signed bills signed bills into law raising the minimum wage. At $15 an hour, Seattle's minimum wage would be the highest in the country. The steep hike has garnered opposition from unexpected places: the companies that already had high wages and benefits.

The most often cited example is Dick's, a privately owned restaurant chain in Seattle. The family that owns Dick's is worried about a minimum wage hike that doesn't take into account benefits. Dick's already pays wages well above the national minimum, with salaries often starting around $9 an hour.

That's on top of generous benefits, which include health insurance, college scholarships, and a smoking cessation program, among others. They worry that a minimum wage of $15 an hour would force them to cut benefits.  

Read more from  about the minimum wage debate.

About half of states have laws setting the minimum wage higher than the Federal level, with Connecticut, Hawaii, and Maryland joining the growing list this spring. Assuming that a compromise isn't reached on the national level, we might expect the wave of pay hikes to continue.

If that's the case, then hospitality will certainly be the most affected industry. Hotels and restaurants account for at least half of the workforce currently earning minimum wage, so we decided to screen those industries for companies that already had higher wages and benefits.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs