As the old adage goes, the three keys to success in business are location, location and location.

Washington Restaurant Association President and CEO Anthony Anton says that, for restaurateurs statewide, the biggest issues right now are minimum wage, minimum wage and minimum wage.

Starting Jan. 1, the minimum wage in Washington state will go up 48 cents to $8.55 an hour from $8.07 an hour.

In many cases, that’s not all that will increase. So will the price of a latte. And a slice of pizza. And a burger and fries.

Restaurateurs, many of whom pay most of their employees minimum wage, are facing their 11th minimum-wage hike in as many years. With margins already thin and food prices increasing as well, many say they must raise prices to remain viable.

“A business has two choices,” says Ken Belisle, managing partner of Landmark Restaurants, which operates The Onion restaurants and the Frank’s Diners in Spokane. “They can raise their prices in hopes the public will still purchase their products, or they can not raise their prices and risk not making enough money to stay open.”

Most are opting for the former.

Chris Bennett, owner of Bennidito’s Pizza, employs 30 people between his two Spokane-area pizzerias. He says servers and delivery drivers typically make minimum wage, and cooks get paid a higher wage.

“We figure out the percentage of increase and raise prices to that … every January, pretty much,” Bennett says. “(Washington) has the highest (minimum wage) in the county, and it’s not necessarily a bad thing. But I don’t know what else we can do.”

With each pay hike, Bennett says he tries to raise pay for the cooks as well, but the gap between what cooks make and minimum wage is shrinking.

Statewide, Anton says, the average pay for cooks has remained flat. As restaurant operators increase the pay for minimum-wage workers, they typically aren’t able to boost pay for cooks at the same time.

As directed by a voter-approved initiative that passed in 1998, the minimum wage for Washington is adjusted for cost-of-living increases. The increases are based on the federal Consumer Price Index for urban wage earners and clerical workers. Washington was the first state to tie its minimum wage to that Consumer Price Index; three others—Oregon, Florida and Connecticut—have followed suit. At $8.55 an hour, Washington’s minimum wage will continue to be the highest in the U.S. and will be a full $2 higher than the federal minimum wage.

Belisle says that when minimum wage was first tied to the Consumer Price Index, the idea didn’t seem like a bad one. The percentages of increases are starting to build upon one another now, however.

“You take 4 percent of $4 versus 4 percent of $8, and you get the picture,” Belisle says. “This thing is going to escalate.”