Minimum Wage

Minimum Wage Hikes in NYC Are Forcing Businesses to Cut Jobs and Raise Prices

The mandated pay increases disproportionately impact the restaurant industry.

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New York City business owners are eliminating jobs, cutting hours, and raising prices in the wake of a $15 minimum wage hike implemented at the end of last year.

According to The Wall Street Journal, entrepreneurs across the city are having to make tough choices to the detriment of their employees in order to stay solvent. Thomas Grech, the president of the Queens Chamber of Commerce, told the Journal that small businesses have been shuttering over the last six to nine months, which he blamed on the minimum wage legislation.

"They're cutting their staff. They're cutting their hours. They're shutting down," he said. "It's not just the rent." Businesses with 11 or more employees were required to raise the minimum wage to $15 on December 31, 2018, while businesses with 10 or fewer workers will have to do so at the close of this year.

As I've previously written, those pay increases disproportionately impact the restaurant industry, which operates on snug profit margins. Waitstaff in New York City currently collect a tipped wage, which sits below the mandatory minimum and allows workers to make up the rest—and sometimes much more—in tips. If the hourly average falls below the minimum wage with tips included, employers are required to make up the difference.

Federally, the tipped base pay is $2.13 per hour, although states and localities can pass their own legislation on the matter. New York upped its tipped wage from $8.65 to $10 per hour at the end of 2018, but the Restaurant Opportunities Center (ROC), a group which advocates for "One Fair Wage" among restaurant workers, would like to see it scrubbed entirely.

In Washington, D.C., for instance, ROC was the driving force behind Initiative 77, which would have required that restaurants compensate all employees with a $15 per hour base pay. Although it passed at the ballot box in June of last year, the D.C. City Council overturned the measure after an outcry from service industry professionals. Many said the raise would backfire, as is happening in New York.

Susannah Koteen, who owns Lido Restaurant in New York's Harlem neighborhood, told CBS News in January that she was consolidating employee positions to save money, putting the lowest-skilled workers in danger. "A server can bus their own table," she said, "but you can't ask a busboy to open a bottle of wine and talk about what it can be paired with." She recently told the Journal that she has been able to avoid layoffs, but is slashing hours and is hawkish about overtime, as she can no longer afford to keep an excess of employees on the clock.

"What it really forces you to do is make sure that nobody works more than 40 hours," Koteen said. "You can only cut back so many people before the service starts to suffer." She is also raising prices with regularity, and has demurred on her plans to open a new restaurant at a larger location.

Koteen's experience comports with a study released by the New York Hospitality Alliance earlier this year. According to the 324 full-service dining establishments surveyed, 75 percent plan to cut hours and 47 percent forecast eliminating some positions entirely in response to the minimum wage increase. What's more, 87 percent said they would need to raise prices to stay above water.

Anthony Advincula, a spokesman for the ROC, has argued that such negative effects need not happen in tandem with the city-mandated wage hikes. "Increasing to $15 would reduce income inequality, and the number of individuals living in poverty now is ridiculously high," he told The Wall Street Journal. "This is not just a business issue, this is a race, gender, pay-equality issue." But if New York City is any example, the measures pushed by Advincula will only serve to make those issues worse.

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    1. Another leftist paean destroyed, but that will be ignored by the MSM.

      Maybe Bernie will be simpatico?

    2. I am making 10,000 Dollar at home own laptop .Just do work online 4 to 6 hour proparly . so i make my family happy and u can do

      ….. Read More

      1. You’re turning Japanese, I really think so.

  1. No one could have possibly foreseen these wholly unexpected events.
    If the owners would accept their proper role of income providers, and ignore the crass business profit and customer care aspects, then this beneficial and necessary wage increase would have had the intended major benefits for everyone.

  2. As a Koch / Reason left-libertarian, I know the government must do 2 things to promote a strong economy — open the borders, and abolish minimum wage laws. The first point will be taken care of in 2021 by the new Democratic President. What we libertarians must do next is convince Democrats to embrace our minimum wage position like we’ve convinced them to support our immigration agenda.

    1. I fear that doesn’t go far enough. We must join the EU so that technocrats in Brussels can dictate our policies. Otherwise, fascism wins.

  3. Aspiring actors hardest hit.

  4. If businesses are having problems with a $15 an hour minimum wage in a high cost of living place like NYC, think what a federal $15 minimum wage might do to the rest of the country.

    The original minimum wage laws at the turn of the last century were intended to price out of the labor markets women, children, minorities, the handicapped and anyone else the larger society thought shouldn’t have jobs. They still price people out of the labor markets.

  5. If these greedy fat cats can’t run a business that pays workers a living wage then they probably are too dumb to be running a business at all and should shut down. Of course, that would render all the remaining employees jobless too, but omelettes and eggs, right comrades?

  6. Trying to understand how the stock image fits the story, Billy.

    Is Man Bun about to fire the server because she’s plating the burger?
    Has the chef who cooked the burger already been fired?
    How is that kitchen so clean, if they’ve already fired the half the cleaning staff?

    1. She’s working her last shift and is preparing a rat poison infused burger to retaliate against the state. Couldn’t you tell?

    2. Man bun is looking for a new job after being informed that this is his last day.

      The chef was replaced by a robot.

      No need to fire up the kitchen. With the increase in prices, who can afford to eat there?

      1. Man bun is looking for a new job after being informed that this is his last day.

        The other person in the picture isn’t a waitress, that’s the customer looking dubiously at the $35 burger she’s just had to cook and serve herself.

        1. That explains all the food sanitation violations – – – – – – –

          1. Right? I’m not seeing hair nets or gloves.

    3. I think I saw something like this on Cinemax After Dark

    4. Man-Bun has been on hold for 45 minutes with local regulators while he supervises his last remaining employee.

    5. Chinny Chin Chin
      August.6.2019 at 5:40 pm
      “Trying to understand how the stock image fits the story, Billy.
      Is Man Bun about to fire the server because she’s plating the burger?”

      Check out the profile of the eye lashes on his right; he’s giving her a reference to his salon.

  7. Federally, the tipped base pay is $2.13 per hour. New York upped it from $8.65 to $10 per hour at the end of 2018, but the Restaurant Opportunities Center (ROC), a group which advocates for “One Fair Wage” among restaurant workers, would like to see it scrubbed entirely.

    And how many ROC members are restaurant workers?

    1. Probably a bunch. The question is, “How many ROC members are restaurant workers with IQ’s above room temperature?”

  8. Fill in the blank:
    “If a business can’t afford to _______________, then the state should punish them and/or run them out of business”.

    A. Pay a living wage
    B. Hire only Americans
    C. Ban plastic straws
    D. All of the above
    E. None of the above

    1. F. Bribe government officials from 6 different agencies with multiple conflicting regulations

      1. Sadly you might have the correct answer.

        1. And you have a fetish for importing rapists, and a huge problem with your anti-Asian racism.

          1. Whatever you say, bro.

            1. No it’s what you say Jeff. Your “fuck Asians as long as I get mine” post is still up.

            2. chemjeff radical individualist
              August.6.2019 at 4:53 pm
              Huh. So the Chinese government subsidized its own exports, in the form of a manipulated currency, in order to sell me cheap stuff? China’s government is taxing their own citizens so that I can have low prices?

              Sounds like a deal to me!

              You’re a sad fucking racist and it’s right there.

              1. Sure, man, whatever.

                1. They can read your post, racist.

                  Why are you such a piece of shit?

                  1. Take your meds.

              2. Whatever else chemjeff may or may not have going on, this post does not smack of racism at all. Opportunism yes, but racism? Please.

                If it had read

                Huh. So the Canadian government subsidized its own exports, in the form of a manipulated currency, in order to sell me cheap stuff? Canada’s government is taxing their own citizens so that I can have low prices?

                Sounds like a deal to me!

                He’d still be an opportunist, but not racist. Saying something opportunistic that happens to be aimed at the Chinese GOVERNMENT (and not Chinese people as a race) is not racist.

    2. Pay for Health Insurance (Hillary on Hillarycare ‘93: ”I’m not responsible for every undercapitalized business”)

      1. Well, that’s old and busted. The new hotness is to ban employer-sponsored health insurance entirely.

        1. No, it’s to import rapists and let people slave for your benefit because you’re a racist.

  9. “Increasing to $15 would reduce income inequality, and the number of individuals living in poverty now is ridiculously high,”

    Of course, with all the layoffs, it would likely do the opposite. I have a feeling that many $15 advocates actually know this, but don’t really care.

    1. “Of course, with all the layoffs, it would likely do the opposite.”

      Instead of servers making more money than busboys because of tips, both will be making $0/hr. Can’t much more equal than that.

      1. $0 = true minimum wage

  10. “This is not just a business issue, this is a race, gender, pay-equality issue.”

    No it’s not, and there’s nothing in a minimum wage law that addresses any of those perceived issues.

    1. You are forgetting the nature and extent of Leftists’ rich fantasy life.

    2. Sure it is. Because those are the only jobs that minorities and women can get since they are always being held down by the white man. Right?

  11. So they got exactly what they voted for.

    1. “So they got exactly what they voted for.”

      Unfortunately, “they” might not have.
      Many SEIU contracts pay wages linked to the M/W, so there’s a great incentive for the SEIU to ‘get out the vote’, and screw the folks who end up on unemployment.

      1. I didn’t say they got what they wanted. I said they got what they voted for.

        1. Indeed; “Democracy is the theory that the Common Man knows what he wants, and deserves to get it good and hard.” – H. L. Mencken

  12. If you can’t afford to pay your workers a living wage, you can’t afford to own a restaurant.

    1. What is a living wage? If you get $8/hr do you instantly die?

      1. It’s whatever wage you’re willing to sell your vote for.

    2. It’s not an employer’s job to pay employees according to some certain standard of living. It’s only the employer’s job to pay employees according to what their labor is worth.

      It is the employee’s obligation to have enough marketable skills to be able to support him/herself with valuable enough labor.

      1. Don’t you have some people to import? That rape children? Like you said you wanted?

      2. “It’s only the employer’s job to pay employees according to what their labor is worth.”

        I would argue that it’s only the employee’s job to pay employees according to what they mutually agreed upon.

    3. The purpose of a business isn’t to provide jobs.

    4. crymeariver
      August.6.2019 at 10:14 pm
      “If you can’t afford to pay your workers a living wage, you can’t afford to own a restaurant.”

      I have a hard time believing that fucking lefty ignoramuses are as stupid as this, but here we have yet one more example.
      Hey, c! Would you prefer they all now get the real minimum wage of $0.00/hour? Are you *REALLY* that stupid?

    5. Now ask yourself how many small business owners pay themselves a wage? And then look at what their wage would be if you calculate the hours they put in at work. Now ask yourself why the waiter or waitress working there deserves to make more then the person who put up capital, time, sweat and who takes all the risk to start a business? Now ask yourself how many new businesses will start if they can’t afford to make a profit and can’t afford to pay their workers and can’t get the capital because employment costs are now ridiculously high that no bank will lend to them? Oh, and to pay for universal health care, they’re likely to see capital gains taxes go up, thus reducing investors willing to invest in start ups. Now ask yourself who is most likely to benefit from the suppression of competition from small businesses? Oh, it’s those evil corporations that the progressives claim to hate but who benefit the most from progressive programs.

      1. “how many new businesses will start if they can’t afford to make a profit”

        That is irrelevant to New Wave Socialists. Profit should be abolished.

  13. NashTiger
    August.6.2019 at 6:34 pm
    “Pay for Health Insurance (Hillary on Hillarycare ‘93: ”I’m not responsible for every undercapitalized business”)”

    Hadn’t seen that quote and it is both imbecilic and evil in two ways:
    1) Paying operating benes has nothing to do with the “capitalization” of a business.
    2) You certainly *are* responsible for the failure if you, by fiat, raise the cost of doing business such as to make it impossible to make a profit.
    Done the list before; only one of the D candidates claims to be a ‘capitalist’, and Yang’s proposals have nothing to do with ‘capitalism’ regardless of the Yang-bros who showed up (once ) to lie about it.
    Beato claims to have held a job in the private sector; do some digging and you find he ran a ‘consulting firm’ until Mom and Dad turned off the faucet.
    EVERY one of them has done nothing but suck on the public teat, and as a result, nor a one has any idea of the issues faced by those who actually produce things people want to buy.

    1. Beto is such a stupid, obnoxious piece of garbage. The dingus is a trust-fund kid living a delusion that he’s ever done anything useful or notable in his entire life. I’ve never seen someone so smug about being such an absolute failure at everything they’ve ever tried to do.

      1. Bernie?
        Please list all of his significant legislative accomplishments.

        1. Start with just one.

          1. Going from an I to a D back to an I and then back to a D?

      2. Were you paying attention when W was still a thing? (Thank God we dodged the Jeb bullet.)

  14. Big states like NY, CA or even TX probably don’t care if minimum wage laws close down these non franchise restaurants. Most of them don’t probably pay too much in income tax and don’t contribute FICA if they pay cash to workers or get free help from family.

    As long as the revenue keeps rolling in from big tech, stocks and energy, the state can endure job losses from restaurants. In CA 3 boba milk tea shop or some gimmick ice cream joint may replace every family restaurant that runs out of business.

    The economy doesn’t run on small businesses. Politicians have to pretend otherwise every election. But it’s no big deal for them if thousands of people lose gateway to employment and remain chronically poor. Look at places like Baltimore.

    1. “The economy doesn’t run on small businesses. ”

      Correct. Apple started with an $800 billion market cap.

      /s

  15. Demonstrating yet again that THE MINIMUM WAGE IS ZERO.

  16. We should not disparage NYC’s efforts. This is instruction in it’s most effective form: The learn by doing method. Not the most efficient methodology, but there’s nothing like measurable results to validate (or discredit) a policy.

    1. But this happens every time they put their hand on the hot stove. There’s no learning involved.

    2. Which might be fine…if the Progressive Left ever admitted that the crash-and-burn failure of one of their policies invalidated it.

      These morons are still touting an economic and political model that brought about the State sanctioned murder of about one hundred million people in the twentieth century.

      That needs to be brought up more often, especially since their only counter argument has been “We can do it RIGHT!”, a blatant call on the idea of American Exceptionalism…which they otherwise wouldn’t touch with a barge-pole.

    3. (Sorry, this was supposed to end up here, but didn’t the first time.)

      You know how this world could be much better? If stupid exploded a) instantly, and b) directly back at the proposer. The only real problem here is that this particular stupid will take several years to explode, and will take out thousands of others first, only some of whom participated in the stupid by voting for the stupid.

  17. “Anthony Advincula, a spokesman for the ROC, has argued that such negative effects need not happen in tandem with the city-mandated wage hikes. “Increasing to $15 would reduce income inequality, and the number of individuals living in poverty now is ridiculously high,” he told The Wall Street Journal. “This is not just a business issue, this is a race, gender, pay-equality issue.”

    Being able to make the business income balance or exceed the expenses is the only issue that has priority in the long term for a business owner. That is not helped by moral busybodies who have no stake in the viability of any individual business and the ear of lawmakers.

  18. Fox Butterfield, is that you?

  19. I wish someone would do a bit of investigative journalism on the Restaurant Opportunities Center. It’d be nice to know who’s behind them, who their membership is, and where their money comes from.

    Bet it’d be interesting.

  20. We need a federal law banning restaurants and then this issue would go away, along with a lot of illegals.

    1. I’m sure that will be next-all labor is exploitative after all, and restaurants cant be trusted to serve only healthy and sustainable food

  21. I bet all those boho progs in Brooklyn who support a living wage also love their authentic mom and pop eateries and markets too. Wonder if they realize that the living wage will force them to close and the only businesses that can eat the cost of the living wage are owned by big evil kkkorporations. Just wait until they get their green new deal, they won’t be able to afford heat or hot water either-and will see the return of the cold water flat. Suffering is good for creative genius I suppose..

    1. They will expect the government to subsidize them.

  22. “Minimum Wage Hikes in NYC Are Forcing Businesses to Cut Jobs and Raise Prices”

    In other news tonight, “Water is Wet”.

  23. “Minimum Wage Hikes in NYC Are Forcing Businesses to Cut Jobs and Raise Prices.”

    But that’s OK as long as it doesn’t affect NYC government workers and any limousine liberals living in Uptown Manhattan.
    That’s all that’s really important.

  24. You know how this world could be much better? If stupid exploded a) instantly, and b) directly back at the proposer. The only real problem here is that this particular stupid will take several years to explode, and will take out thousands of others first, only some of whom participated in the stupid by voting for the stupid.

  25. I wouldn’t use ROC as a credible source for how to successfully run a restaurant. Their own restaurant in New York failed.

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