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$15 minimum wage didn't decimate the local economy, after all
Critics would have you believe that upping the minimum wage in restaurants will lead to massive layoffs and closures. But since raising the minimum wage to $15 per hour nearly a year ago, the restaurant industry in New York City has thrived.
I'm a professor with a focus on labor and employment law. My research on the minimum wage Critics would have you believe that upping the minimum wage in restaurants will lead to massive layoffs and closures. But since raising the minimum wage to $15 per hour nearly a year ago, the restaurant industry in New York City has thrived.
I'm a professor with a focus on labor and employment law. My research on the minimum wage suggests a few reasons why this might be true.
The article goes on to explain why the rise in the minimum wage has not been as bad as had been predicted; in fact, it claims the both restaurant revenue and employment are up.
However, these claims are contradicted by 2 Anonymous Coward submissions, which could be from the same AC but we cannot tell, of the same story from the New York Post:
As predicted, the $15 wage is killing jobs all across the city
https://nypost.com/2019/09/30/as-predicted-the-15-wage-is-killing-jobs-all-across-the-city/
Just as predicted, the $15 minimum wage is killing vulnerable city small businesses, with the low-margin restaurant industry one of the hardest-hit as it also faces a separate mandatory wage hike for tipped staffers.
In Sunday's Post, Jennifer Gould Keil reported on the death of Gabriela's Restaurant and Tequila Bar — closing after 25 years. It struggled all year to find a way out, gradually laying off most non-tipped employees, including some chefs, only to find that quality suffered and customers fled. Owners Liz and Nat Milner finally hung it up.
Other eateries share the pain. In an August survey of its members, the NYC Hospitality Alliance found more than three-quarters have had to cut employee hours, more than a third eliminated jobs last year and half plan to cut staff this year.
"It's death by a thousand cuts," the Hospitality Alliance's Andrew Rigie told The Post, since "there's only so many times you can increase the price of a burger and a bowl of pasta."
Finally, there is another AC submission which claims that the minimum wage has had an effect - but that it is only part of the story. It is important to consider the increase in rents in NY City, and that there might be a shift in the entire market.
Famous Restaurant where Alexandria Ocasio-Cortez Bartended Closes Due to Rising Minimum Wage
[...] And yet, even this high level of sales wasn't enough to inoculate the business from the rising cost of rent and wages in New York. Coffee Shop co-owner and president Charlies Milite told Forbes that rent had become "unusually high," accounting for close to 27% of the restaurant's gross revenues. Add in the scheduled $2-per-hour minimum wage hike set to take place on December 31—an increase that, across Coffee Shop's 150 employees and multiple dayparts of service, would have added $46,000 to the monthly payroll—made it impossible to break even by cutting costs elsewhere.
"It's a wakeup call for our industry in general," Milite said. "When a restaurant is one of the top-ranked restaurants in America, sales-wise, and can no longer afford to operate, you have to look at that and say there's a shifting paradigm in the business."
Original Submission #1 Original Submission #2 Original Submission #3 Original Submission #4
(Score: 3, Interesting) by Anonymous Coward on Thursday October 31 2019, @07:55PM (4 children)
http://www.centernyc.org/new-york-citys-15-minimum-wage [centernyc.org]
(Score: 0) by Anonymous Coward on Friday November 01 2019, @08:29AM (3 children)
That article is making false statements, even on the small section you quoted. In Seattle, both hours worked as well as the gross wages for restaurant workers declined, more so than even critics had expected.
This [nytimes.com] article, though from the NYTimes, does a reasonable job of describing the situation if you can sidestep the editorializing. It also points to the problem: both sides of the issue claimed victory. How? The critical side goes without saying, but the advocates simply claimed that Seattle was in a boom phase and so the wage losses had nothing to do with the minimum wage hike - no, it was a simple 'regression to the mean.' The researchers responded to this by showing how they controlled for it, the advocates disputed that, and back and forth they went. However both sides did accept a decline in employment and wages, only the reason was in dispute. So your article's statement that there were 'no employment/wage declines' is simply false.
The point here is that after-the-fact analysis is completely worthless. You need to stick a group of advocates and a group of critics in a room together before a change, and have them draw up ranges they expect to see. For instance a "loss" of 3% is clear evidence of a failure, a gain of 6% clear evidence of a success -- everything in between is a wash. You agree upon measurement methods, and then provide regular updates. You'd need to set up ahead-of-time controls for things like recessions, but this can be done. Not a simple task to be sure, but one that might actually give you something like the lost of art of impartiality.
For further evidence that this sort of retrofitting is not isolated, here [phys.org] is another more recent article comparing two other studies on Seattle. They studied whether prices had inflated as a result of the minimum wage. Once again one said clearly yes, the other said clearly no. Neither is lying, they're just massaging their numbers and assumptions in a way to get whatever conclusion they want. Social science in a nutshell.
This leads to the deterioration of discussion in society and increasing radicalism. Your article made false statements, but you naturally believed it because it confirmed your biases, which you feel are true. But the catch is that those biases are likely how you ended up getting linked to that article in the first place, as I doubt you're a regular patron of whatever CenterNYC is. So it becomes a self fulfilling prophecy: anything you read online on a topic will tend to support your worldview unless you actively seek out things that you don't believe to be true - which most do not. And as a result of this little phenomena people end up thinking somebody saying things that run against their worldview must be an idiot or, at best, grossly misinformed by 'fake news.' Because after all we'd never be the ones consuming such things, and everything we've read says exactly what we thought!
(Score: 1, Touché) by Anonymous Coward on Friday November 01 2019, @01:28PM (2 children)
That may be true for Seattle, but the article is about New York City and not Seattle.
I'm sorry. I realize that it's difficult to understand that places other than your annoyingly hipsterized city actually exist. I'm here to tell you that a bunch of other places exist. No. Really.
So, when you see an article about someplace other than Seattle, it might be a good idea to recognize that it's not actually Seattle. I know, I know, that's just crazy talk. And you need to run to the pop-up health and beauty aids truck (gluten-free toothpaste, I'm sure) as it's only in your neighborhood for a few hours every week.
Please, just try to remember that places other than Seattle really do exist.
(Score: 0) by Anonymous Coward on Saturday November 02 2019, @04:42AM (1 child)
Did you not read the quote?
It's like more than 5 words suddenly cause people to lose all reading comprehension nowadays.
(Score: 0) by Anonymous Coward on Saturday November 02 2019, @05:11AM
Did you get your gluten-free toothpaste?