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:
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.
[...] 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: 5, Insightful) by Anonymous Coward on Thursday October 31 2019, @07:59PM (17 children)
So shitty businesses closed and made way and made workers available for better run businesses? Imagine that!!
If your business only survives because you don't pay your workers, maybe it's time to re-evaluate its viability, product and/or management
(Score: 1, Informative) by Anonymous Coward on Thursday October 31 2019, @08:01PM (5 children)
It looks more like academics in their ivory tower only look at government-manipulated statistics that tell a different story than what restaurant owners are experiencing in reality.
(Score: 1, Informative) by Anonymous Coward on Thursday October 31 2019, @08:07PM (3 children)
Reality is a troll to some people:
http://www.centernyc.org/new-york-citys-15-minimum-wage [centernyc.org]
(Score: 4, Informative) by Anonymous Coward on Thursday October 31 2019, @08:21PM (2 children)
Let us look where the data is coming from:
https://www.labor.ny.gov/stats/lstechqcew.shtm [ny.gov]
And what do you need to do to be counted:
https://eligibility.com/unemployment/new-york-ny-unemployment-benefits [eligibility.com]
Uh, so there is a minimum wage threshold to be counted. If you raise minimum wage you will be counting more people, even if there is no increase in jobs.
It is academics drawing the wrong conclusions from government-manipulated statistics. Just as I said. This took me under 10 minutes to figure out.
(Score: 0, Offtopic) by Anonymous Coward on Thursday October 31 2019, @08:47PM (1 child)
More details:
https://www.labor.ny.gov/ui/dande/titles/title2.shtm [ny.gov]
https://www.labor.ny.gov/ui/dande/titles/title5.shtm [ny.gov]
(Score: -1, Offtopic) by Anonymous Coward on Thursday October 31 2019, @10:51PM
How the hell is this offtopic? It shows you what they measured to come to the conclusion that restaurant jobs are growing.
Someone moderating this thread can't draw conclusions from themselves and needs to be told what to think apparently.
(Score: 3, Insightful) by sjames on Saturday November 02 2019, @05:32PM
So your theory is that the Trump administration is manipulating the figures to favor higher minimum wage?
(Score: 0) by Anonymous Coward on Thursday October 31 2019, @08:42PM (3 children)
Yeah, it's working great. Businesses are letting employees go until they're one employee short of the number needed to conform to the $15/hr law. So you now have a short staff, under $15/hr, part time, no benefits, and pissed off cunstomers because there's only one person at the register and the shelves are bare because there's nobody stocking.
(Score: 5, Insightful) by DannyB on Thursday October 31 2019, @09:31PM (2 children)
How is that not working great?
Businesses that won't pay their employees, that don't seem to mind that they are short staffed, don't care if customers are pissed off, probably shouldn't be in business in the first place.
Let them disappear to be replaced by better run businesses.
Companies will do anything and everything to attract and retain bright competent people -- except pay them and treat them well. Unless they exhaust all other options first.
To transfer files: right-click on file, pick Copy. Unplug mouse, plug mouse into other computer. Right-click, paste.
(Score: 0) by Anonymous Coward on Friday November 01 2019, @01:59AM (1 child)
We're not talking mom & pop shops here. This is nationwide chains like Walmart, Target, Dollar Tree, anyplace that can get by with fewer than 25 employees per store. They're even skirting that number by promoting employees to some sort of bullshit manager position (janitorial manager) putting them on salary and working them overtime witch works out under $15/hr.
(Score: 2) by JoeMerchant on Friday November 01 2019, @01:41PM
Theft from the workers by employers breaking labor laws out-paces all other theft by something like 10:1 in the USA.
🌻🌻 [google.com]
(Score: 3, Informative) by stormreaver on Thursday October 31 2019, @09:39PM (4 children)
That interpretation would only be valid if the market were experience a shortage of workers (who would have already gone to those "better run businesses" before the wage increase). The reality is that there have been more workers than jobs for a very long time, so every closing business produces more unemployed (and maybe unemployable) workers.
When the combination of the ACA and a minimum wage hike struck my city, there were lots of minimum wage workers who either lost their jobs entirely or had their hours cut in half.
(Score: 2, Touché) by Anonymous Coward on Friday November 01 2019, @05:24AM
Yeah, and when they made slavery illegal a lot of cotton farms had to close down
(Score: 2) by JoeMerchant on Friday November 01 2019, @01:56PM (2 children)
Where's that logic coming from? The "better run businesses" still didn't increase their wages until forced to by the law, what's the incentive that would get workers to move from where they are to the "better" businesses without the wage increase?
🌻🌻 [google.com]
(Score: 2) by stormreaver on Friday November 01 2019, @04:10PM (1 child)
If there was a shortage of workers, employers would have been competing for them, and the workers would have already been employees there. Better-run businesses would have had the financial ability to pay more and/or offer better working conditions. Since neither of these things happened, we can assume there was no shortage of workers. Since such places typically treat their workers as replaceable cogs, we can assume that there was actually an oversupply of workers.
(Score: 2) by JoeMerchant on Friday November 01 2019, @05:16PM
Coach Butterworth (Bad News Bears) has a chalkboard lesson for you...
And, past tense, there's really no need to guess, the data is out there.
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Thursday October 31 2019, @10:12PM
So destroy a business to make way for another one that costs even more to run.
You do realize that is 100% the broken window fallacy, right? right?.... Right?
(Score: 1) by khallow on Friday November 01 2019, @01:41AM
We didn't need those jobs anyway.