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Higher Minimum Wages Blamed for Closure of Iconic NYC Coffee Shop Where Alexandria Ocasio-Cortez Worked

An ironic lesson in progressive policies, provided by an iconic New York City establishment and the left's rising star.

Before she was the rising star of the progressive left, Alexandria Ocasio-Cortez worked shifts at the iconic Coffee Shop in Union Square, Manhattan.

That espresso-sized biographical nugget tells you a lot about Ocasio-Cortez. It grounds her as a real woman of the people, for one. She's held a low-paying service sector job. She had to commute from the working class, minority community of the Bronx to fill the coffee cups of well-off New Yorkers living in Manhattan.

But it also tells you something about the trajectory of progressivism. On Monday, Ocasio-Cortez paid what is probably her final visit to her former employer—because the Coffee Shop is closing later this year—and posted a sweet, nostalgic note about it on Twitter:

What Ocasio-Cortez failed to note is that the Coffee Shop is shutting its doors for the last time, at least in part, because of New York City's rising minimum wage.

"The times have changed in our industry," Coffee Shop owner Charles Milite told the New York Post last month. "The rents are very high and now the minimum wage is going up and we have a huge number of employees."

In other words, one of the very progressive policies that Ocasio-Cortez is riding towards a seat in Congress—she has called for a $15 federal minimum wage, up from $7.25 currently—has had very real consequences for people she probably knows fairly well. Unlike Ocasio-Cortez, it's a safe bet that most of the roughly 150 people who work at the Coffee Shop won't land a job in public office when they lose their current jobs in October.

Will that make the progressive darling rethink her stance on the minimum wage? There's no indication of that from Monday's tweet.

This is not the first time Ocasio-Cortez has missed an opportunity to acknowledge that expensive government mandates can have real world consequences. The Daily Show's Trevor Noah, for example, pressed Ocasio-Cortez (lightly) about whether her $15 federal minimum wage proposal would stagnate economic growth.

No, she said, claiming that Seattle had seen no such stagnation after implementing the same minimum wage. She also bizarrely claimed that 200 million Americans get by on less than $20,000 per year—a "fact" that's pretty difficult to swallow given that the entire American labor force is 162 million.

But the Seattle argument is more interesting, because there's a fair bit of evidence that the minimum wage has caused job losses in that city. Consider what researchers at the University of Washington's School of Public Policy and Governance found: Namely, that the number of hours worked in low-wage jobs in Seattle has declined by around 9 percent since the start of 2016, "while hourly wages in such jobs increased by around 3 percent." The net outcome? In 2016, the "higher" minimum wage actually lowered low-wage workers' earnings by an average of $125 a month.

This sort of trade-off should be expected. Higher minimum wages will force some businesses to cut staff, while others might close entirely. If you still have a job after that, sure, you'll make more money. If you don't, well, finding a job just got more difficult.

But the point isn't to argue with Ocasio-Cortez about the consequences of Seattle's minimum wage hike (her defenders will point to other studies, like one commissioned by city officials and conducted by researchers at Berkeley, which show no ill-effects whatsoever). The point is that even if businesses in Seattle or New York City could absorb the economic hit of a $15 minimum wage, what would happen to businesses in places that aren't modern metropolises with high costs of living and relatively higher wages? Does a $15 federal minimum wage make sense in western Pennsylvania, in eastern Kentucky, or in central California?

If Ocasio-Cortez can't look at the loss of an iconic New York City business—a place where she used to work, no less—and see a potential problem with her worldview, there is little hope she that will ever come to understand the potential problems created by one-size-fits-all employment policies.

Photo Credit: JONATHAN BACHMAN/REUTERS/Newscom

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  • Daniel||

    Blind, stupid, and progressive is no way to go through life.

  • ||

    Everyone comes to New York to gape slack-jawed at beauty

    Blind, stupid, progressive, and self-fellating, but I repeat myself.

  • Leo Kovalensky II||

    That was pretty redundant. You could have just said progressive.

  • Earth Skeptic||

    But Bluto did make it to the US Senate.

  • JoeBlow123||

    I am tired about stories about her. Who gives a duck about her.

  • Shirley Knott||

    "Occasional-Cortex" indeed.
    That terminology is excellent.

  • perlchpr||

    But the Seattle argument is more interesting, because there's a fair bit of evidence that the minimum wage has caused job losses in that city.

    "Socialist lies about effects of socialism" isn't actually all that interesting.

  • Leo Kovalensky II||

    Even if Seattle did have job losses, it was only because of all the wrecker/kulak business owners.

  • Sevo||

    Yeah, if your business can't pay what I think the workers should make, you SHOULD go out of business!

  • Dillinger||

    did her opponent zoom her 4 seconds later about her policies costing her friends their yobs?

  • damikesc||

    Good chance her former co-workers side with her anyway.

    Nobody said pattern recognition was taught well these days.

  • Dillinger||

    hopes high some generation soon is naturally smart.

  • Just Say'n||

    "She had to commute from the working class, minority community of the Bronx to fill the coffee cups of well-off New Yorkers living in Manhattan."

    Except that she grew-up in a primarily white upper income suburb of New York City. Like all socialists, the working class is as alien to her as basic economics.

  • Just Say'n||

  • Number 2||

    I don't know about you Eric, but when I lived in New York City, Union Square was a place to avoid.

  • Number 2||

    And Yorktown Heights is no poor minority community.

  • TrickyVic (old school)||

    How long ago was that?

    Times Square is still a place to avoid but for different reasons than the reasons one had in the 1980s.

  • Dan S.||

    And the Bronx is not a single "community", whether "working class, minority" or otherwise. There are several such communities within it, but it also contains the wealthy area of Riverdale.

  • Bob Armstrong||

    Yes . My immediate thought .

    Just where in the Bronx does she live ?

    And her jobs bartending , etc , in Manhattan make for a far from underprivileged rather average New York lifestyle .

  • Bob Armstrong||

    " ... when I lived in New York City, Union Square was a place to avoid."

    When was that ? Not in the last 30 years . -- Unless you were a Bridge & Tunnel guy who never went south of MidTown .

  • ||

    I know that spot quite well. The article got a few things wrong that you inferred correctly.

    It's not a "Coffee Shop", but a once very trendy, then a staple, bar and brunch spot. It's known for a wait staff that are almost exclusively part-time models. She wasn't exactly a "Flo" who was slinging coffees to truck drivers, it was a quasi-glamor gig for beautiful people to hang out with celebrities.

    And it's honestly really unlikely minimum wage had anything to do with the place closing--it has more to do with the rent in Union Square going up while the demographics of that neighborhood shifting to a more corporate friendly, less culturally relevant area (it's full of flagship stores, fore example). Spots like Coffee Shop now mostly thrive in Brooklyn.

    In other words, its a stretch to say it closed from government intervention rather than normal cultural and market forces. It's also a stretch to say having a beautiful-person twenty-somethings gig qualifies as working class struggle as well.

  • BestUsedCarSales||

    I'm a normal, working person who chose to run for office, because I believe we can have a better future.

    YES FELLOW POOR PEOPLE. I ALSO KNOW ABOUT WORKING WITH THE PEOPLE. VOTE YES ON ME. I AM A PERSON.

  • Just Say'n||

    You are not a person, Mr. Sarwark. You are a monster

  • Mickey Rat||

    Omelets regrettably require breaking some eggs.

  • Longtobefree||

    Well, OK. As long as they are from hormone free, antibiotic free, free range chickens that consented.

  • Juice||

    I'm gonna go out on a limb here and say the main reason is the rent. Yes, the minimum wage increase doesn't help, but even if the wages stayed the same, the increasing rent would have still done them in.

    I saw some thing about a real estate investor who used to be a restaurateur. He said he quit and shifted to real estate and being a commercial landlord because when he ran the restaurant he realized that although he was working his ass off and his restaurants were very successful, all his revenues were going to the landlord (and taxes, etc.) and he was making dick. So, he decided to be the landlord. He doesn't have to work nearly as hard and he makes the big bucks that these restaurants are bringing in.

  • Just Say'n||

    I wonder why rent is so high in NYC? Must just be a result of demand that just happens to not effect cities like Houston or Charlotte, despite them enjoying a faster rate of population growth than NYC

  • BYODB||

    Population density might be a more compelling reason. Houston or Charlotte, I wager, do not compare to New York City on that metric. Plus, it's basically an island so it's just all around not a great place to put a major since the only direction left to really expand is up.

  • Just Say'n||

    Pretty sure rent control and restrictive zoning is a more compelling reason, but it's hard to know the real reason since rent control isn't going away anytime soon so the hypothesis can't be tested.

    I just know that Houston is poised to be the third largest city in America by the next census and valuations remain affordable and the City is the largest municipality in the country without extensive zoning rules

  • BYODB||


    Pretty sure rent control and restrictive zoning is a more compelling reason

    Yeah, those are also major factors. Just saying that even with those factors I would be absolutely shocked if wages didn't exceed their rent costs with 150 employees. If every one of their employees work for one hour, it would cost far more than the simple $1950.00 per hour once you tack on benefits (even for just some of them) and withholding etc.

    Largeness of a city matters less than it's density. I know a lot more about Houston than I do New York City, but I do know the comparative density.

  • Just Say'n||

    Maybe. Like I said, though, everything is speculative because neither hypothesis can be tested

  • BYODB||

    At least not with the data given, it's true. What can I say, I'm something of a contrarian lol

  • Old Guy2018||

    rent control only applies to apartments not commercial establishments. Rents have been crazy for years with many if not most places on the upper east and west sides lasting only short times before they go out of business. This has basically moved further and further downtown.
    Union square was a really nice place 50 years ago then turned dump and now is become fashionable again. Restaurants are a higher overhead business and I would bet the rent has been going up and the jump in the minimum wage was just the last straw. Probably coupled with the owners getting older and just deciding it was not worth it anymore.

  • TrickyVic (old school)||

    I think Cortez may have just done something similar. She sees where the tax money is going and decided to be a politician.

  • BYODB||


    I'm gonna go out on a limb here and say the main reason is the rent. Yes, the minimum wage increase doesn't help, but even if the wages stayed the same, the increasing rent would have still done them in.

    Rent vs. wages isn't much a contest in any business except tiny ones, wages will virtually always be a higher cost of doing business by far. If that isn't true in New York for a company with 150 employees, I'd be truly shocked.

  • TrickyVic (old school)||

    A $2 increase for 150 employees for 35 hrs weekly is $10,500. Depending on if they have old rent or new rent, a $40,000 rent increase is not unheard of for a place that would accommodate 150 workers.

    Coogan's

  • BYODB||

    'Virtually always' meaning, of course, that there can be exceptions. Whether or not this is one I couldn't say, but it's fairly rare. I suspect that it's more common in New York City, but as a general rule it's extremely unlikely.


    Coogan's restaurant and bar, a civic fixture in Washington Heights for 32 years, reached a new agreement with its landlord late Friday afternoon, just three days after its owners announced they would be closing in May because of a demand for a $40,000 monthly rent increase.

    A wave of public support for the establishment, including from Lin-Manuel Miranda, the creator of "Hamilton" who has been a patron since his boyhood, led its landlord, NewYork-Presbyterian Hospital, to reopen discussions with the owners of Coogan's. A lease extension was agreed upon shortly after 4 p.m. Friday. Terms were not disclosed.

    Yeah, it's not unheard of. Usually in those cases it's because the landlord wants the tenant out, and raising the rent is a fairly effective win/win strategy for the owner in those cases. In the cited case, the rent was not actually raised by $40,000, it was threatened. Classic negotiation technique, as is getting public support against your landlord.

  • perlchpr||

    Being unfamiliar with both commercial real estate and New York rent prices, the idea of a $40k rent increase is just mind boggling.

    The increase alone is 2/3rds of what I make in a year.

    Good lord.

  • Old Guy2018||

    unfortunately that is not a large amount for a commercial site big enough for a staff of 150 people. In the 1960 commercial space in Manhattan was about $50 a square foot and I had read someplace that is was over $150 a square foot in the 1980s.
    No clue what it is now but I bet it is higher

  • EddieinLA||

    I had a minth ling trial involving a restaurant client in a lawsuit against the landlord. My clients had four high end, seven figure grossing fast casual, high end cafes. Their labor costs were the highest single line item on their P& L's with rent being a distant second. They had locations in some if the hughest rent areas of Los Angeles, much nicer than Union Square in NYC. Labor is definitely the largest single cost of doing business in the restaurant industry. Especially for a table service restaurant like the Coffee Shop. If labor costs weren't the major issue, then the Coffee Shop is completely different from any other restaurant in the world.

  • EddieinLA||

    That should say " month long trial"

  • Longtobefree||

    We knew that. Those damn keyboards are all probably socialists anyway - - - - - -

  • Trollificus||

    You know the old saying: "There is no "I" in "mith ling"."

  • OpenBordersLiberal-tarian||

    Admittedly there are minor policy disagreements between democratic socialists and libertarians. However, we must not let the perfect be the enemy of the good. Ocasio-Cortez agrees with us libertarians on our primary immediate goal: #AbolishICE. This is important because not only is open borders the correct approach for humanitarian reasons, but also because immigration is essential for a strong economy. Clearly Orange Hitler's draconian immigration crackdown is part of the reason the economy has tanked since he took office.

    Once the progressive / libertarian alliance has permanently defeated the alt-right, then we can work out our differences on issues like the minimum wage or Charles Koch's tax rate. But as long as Putin's Puppet occupies the White House, petty in-fighting will get us nowhere. All anti-Drumpf factions — libertarians, socialists, progressives, even #NeverTrumpers like Jennifer Rubin — must stand united.

    #LibertariansForOcasioCortez

  • perlchpr||

    Admittedly there are minor policy disagreements between democratic socialists and libertarians.

    I think it's this sort of thing that makes your work so effective. It's the "ludicrous statement phrased in a way to seem reasonable" thing, and you do it well. :D

  • Rebel Scum||

    minor policy disagreements

    That's one way to put it, I suppose.

    B+ overall

  • LarryA||

    Once the progressive / libertarian alliance has permanently defeated the alt-right, then we can work out our differences

    You might want to look into just how progressives tend to "work out differences" after they seize power. There are numerous examples.
    But read quick, as progressives always take care of the intelligentsia who thought they were allies before they bother subjugating the proletariat.
    "Who? Me? I'm on your side! Why am I standing up against the wall?"

  • Old Guy2018||

    isn't that what was said by Leon Trotsky before he was ice picked in Mexico?

  • TrickyVic (old school)||

    The few extra bucks they would have to cough up for extra pay is probably minuscule compared to the rise in rent.

    Not defending minimum wage, but rent increases are probably the biggest cause of places shutting down in NYC. But hey you got to tax the crap out of landlords of you want a strong social services infrastructure. Which in turn will get you more of this.

  • EddieinLA||

    Wrong. Labor is definitely the highest cost item for almost any restaurant.

  • babar||

    That doesn't change the fact that rents are rising faster than wages and eating into profits. That's been the trend in NYC for at least a decade.

  • BYODB||


    In other words, one of the very progressive policies that Ocasio-Cortez is riding towards a seat in Congress—she has called for a $15 federal minimum wage, up from $7.25 currently—has had very real consequences for people she probably knows fairly well.


    Factually speaking, the minimum wage in New York City isn't $7.25 so I don't know why the author decided to include that number when it isn't applicable even in New York state.

  • BYODB||


    But the point isn't to argue with Ocasio-Cortez about the consequences of Seattle's minimum wage hike (her defenders will point to other studies, like one commissioned by city officials and conducted by researchers at Berkeley, which show no ill-effects whatsoever)


    So is this an 'alternative fact', 'fake news', or 'the truth isn't the truth'?

  • BYODB||


    If Ocasio-Cortez can't look at the loss of an iconic New York City business—a place where she used to work, no less—and see a potential problem with her worldview, there is little hope she that will ever come to understand the potential problems created by one-size-fits-all employment policies.


    She's a socialist, what part of this do people not understand? She won't see the writing on the wall, even when she's up against it.

  • LarryA||

    Factually speaking, the minimum wage in New York City isn't $7.25 so I don't know why the author decided to include that number when it isn't applicable even in New York state.

    Because Ocasio-Cortez is running for Congress, not the NYC Council or NY Legislature, and the Federal minimum wage is indeed $7.25.

  • Naaman Brown||

    She wants to raise the federal minimum wage from $7.25 to $15.00.

    There is a world outside Manhattan Island in spite of the imperial view.

  • TrickyVic (old school)||

    If I started a campaign to raise the minimum wage to $10, would anyone fall for it? (IIRC the current is $11)

  • Naaman Brown||

    22 Aug 2018, Wikipedia: "Since July 24, 2009, the federal government has mandated a nationwide minimum wage of $7.25 per hour." 29 states have set slightly higher minimums as of Jan 2018.

    My home state has no state minimum wage. After the closing of the book plant where I worked, I was placed by a temp agency in a variety of light industrial jobs at a wage of $10 an hour 2006-2008. My cost of living was and is nowhere near NYC levels. Imposition of a federal minimum of $15 would probably dry up any part time jobs to supplement my retirement.

  • TrickyVic (old school)||

    Good news comrades, you wages are being increased from $500 a week to $1000 a month!

  • Benitacanova||

    Occasional-Cortex is more than a few synapses short of a functioning brain.

  • Rebel Scum||

    And then She Guevera learned the error of her ways and renounced socialism and big government for freedom and low taxes. //jk

  • JeremyR||

    I think the problem here is not the minimum wage, but a coffee shop somehow needing 150 employees,

  • JeremyR||

    I mean, that's like the number of employees a Walmart super center has

  • D-Pizzle||

    That's probably because, for some inexplicable reason, each employee works a max of 29 hours a week.

  • Show Me||

    My guess is she has no strong feelings or knowledge about the Minimum Wage, she knows it is likely to garner votes from people in her district. It's all about the votes.

  • John B. Egan||

    I think it's a big jump to take the tweet of the coffee shop owner and extrapolate it to Ocasio-Cortez is responsible for this coffee shop closing..

    The owner was clear that there were several factors involved in their decision to close, rising rents, a large staff **and** wages. He never did say the potential wage increase was THE DECIDING FACTOR.

    So I checked. The average Barista in NYC earns $24,666 a year (Barista Salary in New York, NY (August 2018) | Glassdoor) .. Which boils down to $13 ph (presuming a full time job) as opposed to the $15 ph that she and many others champion. (Aussies for example already enjoy $17.50 ph minimum wage.)

    To allow the author to inflate a $2 ph difference as THE REASON THE SHOP IS CLOSING .. is utter nonsense. You should be ashamed.

  • Muzzled Woodchipper||

    No ever wrote that she is responsible for the coffee shop closing, just that she refuses to recognize that a rising minimum wage is but 1 of the factors leading to the closing.

  • Roger Knights||

    "The average Barista in NYC earns $24,666 a year (Barista Salary in New York, NY (August 2018) | Glassdoor) .. Which boils down to $13 ph. ... To allow the author to inflate a $2 ph difference as THE REASON THE SHOP IS CLOSING .. is utter nonsense."

    She called her workplace a "restaurant." Even if really a coffee shop, not all, and not most, of its 150 employees were baristas. Baristas do relatively skilled work and are, I suspect, better paid than the average employee (e.g., dishwasher, etc.).

  • Gordon Y||

    Well, maybe the the government can step in and create state-run coffee shops. And they will be as efficient as the DMV.

  • Longtobefree||

    Of course, the government run coffee shops in California will not sell that evil cancer causing beverage.
    I don't know what government run coffee shops in California will sell, but it won't be coffee.

  • vek||

    As far as Seattle goes, the $15 an hour minimum wage is one of the main reasons I am leaving. I own a couple businesses. One that isn't effected by minimum wage. The other started as a hobby thing, but has been growing at a really good clip. That will require minimum wage/just above wages, for pretty menial jobs. It is what it is.

    That is the single biggest reason why I cannot expand that business in Seattle.

    Now the real kicker is the idiots passed a $13.50 minimum wage that's phasing in state wide... That is the biggest reason why I am probably moving to Idaho, where they have no minimum wage, just the federal $7.25.

    Now the thing is Seattle is expensive. The MARKET WAGE for minimum wage type jobs here years ago before the hike was basically $11ish an hour. NOBODY I knew of worked for less than that. So $15 here borked Seattle, but by the time it's fully phased in in a couple more years, it will really only be a couple dollars an hour over market rates.

    In Spokane, Yakima, EVERYWHERE ELSE, $13.50 an hour is going to kill their economy. The fact that these idiot socialists can't AT LEAST figure out that localized wage increases are a LITTLE more sane is... Well, insane.

    So Idaho here I come! Even if I continue to live on the Washington side, my business will almost certainly be on the Idaho side.

  • babar||

    Coffee Shop is a dinosaur that hasn't renovated since the Nineties, serves mediocre fare that hasn't kept pace with the city's growing foodie culture, and occupies a now prime slice of real estate that could be put to better use. I have fond memories of that joint and its fabulous model-beautiful employees, but its time has passed. Plenty of other restaurants are thriving in the area and paying above minimum wage. This is all down to mismanagement of a once promising brand.

    I'm not a fan of AOC either but I thought you guys were known for rational and dispassionate economic analysis. Apparently I was mistaken.

  • Mark22||

    "I'm a normal, working person who chose to run for office, because I want wealth and power and politics is the only way someone as dumb as me can get it"

    FTFY

  • NoVaNick||

    If Ocasio-Cortez and Pocahontas want the $15 minimum wage then fine. They should also agree to cap their salaries at $15 per hour.

  • 1980-f||

    Why should they? I fail to see the logic.

  • Wrath0fKahn||

    So following after Trump, it seems like the next wave of politicians are going to be even less well-informed than the current crop and get most of their 'statistics' from OccupyDemocrats Twitter posts with no connection to reality at all.

  • XM||

    OT - is anyone else having trouble loading Reason.com at Chrome? The site won't display correctly on that browser.

  • 1980-f||

    If your business model relies on paying your employees a salary that doesn't allow them to live a reasonably comfortable life, that model needs changing. Don't blame the minimum wage. Most of the people lambasting this as unnecessary government interference ought to be honest and tell us how much they are earning. I suspect it's more than $15 an hour.

  • zb||

    As much as I'd like to blame the MW, the coffee shop probably couldn't stand to afford exorbitant NYC rent regardless of how well they paid their baristas.

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