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posted by janrinok on Thursday October 31 2019, @07:45PM   Printer-friendly
from the toss-of-the-coin dept.

$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

https://www.forbes.com/sites/maggiemcgrath/2018/10/12/remembering-the-coffee-shop-a-new-york-institution-is-closing-after-28-years/#6608736d10a0

[...] 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 #1Original Submission #2Original Submission #3Original Submission #4

 
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  • (Score: 4, Informative) by Anonymous Coward on Thursday October 31 2019, @08:21PM (2 children)

    by Anonymous Coward on Thursday October 31 2019, @08:21PM (#914313)

    Let us look where the data is coming from:

    Covered" employment refers broadly to both private-sector employees as well as state, county, and municipal government employees insured under the New York State Unemployment Insurance (UI) Act. Federal employees are insured under separate laws, but are considered covered for the purposes of the program. Employee categories not covered by UI include some agricultural workers, railroad workers, private household workers, student workers, the self-employed, and unpaid family workers.

    https://www.labor.ny.gov/stats/lstechqcew.shtm [ny.gov]

    And what do you need to do to be counted:

    To qualify for NY unemployment benefits, you must meet the following earnings requirements during one of your base periods:

            You must have received wages in at least two of the quarters
            You must have been paid at least $2,100 in one calendar quarter for claims filed in 2017.
            Total wages paid to you must be at least 1.5 times the amount paid to you in your highest quarter. For example, if you made $5,000 in one quarter, then the total for all four quarters must be $7,500 or higher.

    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.

    Starting Score:    0  points
    Moderation   +4  
       Insightful=1, Interesting=1, Informative=2, Total=4
    Extra 'Informative' Modifier   0  

    Total Score:   4  
  • (Score: 0, Offtopic) by Anonymous Coward on Thursday October 31 2019, @08:47PM (1 child)

    by Anonymous Coward on Thursday October 31 2019, @08:47PM (#914322)

    More details:

    Sec. 511. Employment.

    1. General definition. "Employment" means (a) any service under any contract of employment for hire, express or implied, written, or oral and (b) any service by a person for an employer

    [...]

      4. Other included work. The term "employment" shall include (a) Service, wherever performed within the United States, the Virgin Islands, or Canada, if

    (1) contributions are not required with respect to such service under an unemployment compensation law of any other state, the Virgin Islands, or Canada, and
    (2) the place from which such service is directed or controlled is in this state;

    (b) Service performed within this state not otherwise within the purview of the foregoing provisions of this section if contributions are not required with respect to such service under corresponding provisions of an unemployment compensation law of any other state.

    Subd. 4 as amended by L. 1971, Ch. 607 effective January 1, 1972.

    5. Work without the state or in a foreign country. (a) Service performed entirely without the state, with respect to no part of which contributions are required under an unemployment compensation law of any other state or of the federal government, is employment if an election with respect to the person`s service has been made and approved pursuant to the provisions of section five hundred sixty-one of this article.

    (b) The term "employment" includes service by a citizen of the United States performed for an American employer outside the United States, except Canada or the Virgin Islands, provided contributions are not required with respect to such service under an unemployment insurance law of any other state pursuant to criteria which correspond to those of subdivisions two and three of this section, if

    (1) the employer`s principal place of business in the United States is in this state, or
    (2) the employer has no place of business in the United States but is

    (i) an individual person who is a resident of this state, or
    (ii) a corporation which is organized under the laws of this state, or
    (iii) a partnership or a trust and the number of partners or trustees who are residents of this state is greater than the number who are residents of any one other state, or

    (3) none of the criteria of subparagraphs (1) and (2) are met but the employer has elected coverage of the service in this state or, the employer having failed to elect such coverage in any state, the individual performing the service has filed a claim for benefits under this article on the basis of such service.

    (c) For purposes of this subdivision, "American employer" means

    (1) an individual who is a resident of the United States; or
    (2) a partnership if two-thirds or more of the partners are residents of the United States; or
    (3) a trust if all of the trustees are residents of the United States; or
    (4) a corporation organized under the laws of the United States or any state.

    [...]

    Sec. 518. Wages.

    1. Limitation. (a) "Wages" means all remuneration paid, except that such term does not include remuneration paid to an employee by an employer after eight thousand five hundred dollars have been paid to such employee by such employer with respect to employment during any calendar year, except that such term does not include remuneration paid to an employee by an employer with respect to employment during any calendar year beginning with the first day of
                  that exceeds

    January 2014
            $10,300
    January 2015 $10,500
    January 2016 $10,700
    January 2017 $10,900
    January 2018 $11,100
    January 2019 $11,400
    January 2020 $11,600
    January 2021 $11,800
    January 2022 $12,000
    January 2023 $12,300
    January 2024 $12,500
    January 2025 $12,800
    January 2026

    $13,000

    and each year thereafter on the first day of January that exceeds sixteen percent of the state's average annual wage as determined by the commissioner on an annual basis pursuant to section five hundred twenty-nine of this article; provided, however, that in calculating such maximum amount of remuneration, the amount arrived at by multiplying the state's average annual wage times sixteen percent shall be rounded up to the nearest hundred dollars. In no event shall the state's annual average wage be reduced from the amount determined in the previous year. The term "employment" includes for the purposes of this subdivision services constituting employment under any unemployment compensation law of another state or the United States.

    (b) Subject to the same limitation the term "wages" includes also all compensation paid by an employer to persons in his employ with respect to which he is not liable for contributions under any other unemployment insurance law, even though such compensation is not remuneration as defined by section five hundred seventeen of this article, or the services of such persons are not in employment as defined by section five hundred eleven of this article, if the employer is liable for a tax on such compensation under the federal unemployment tax act.

    https://www.labor.ny.gov/ui/dande/titles/title2.shtm [ny.gov]

    Sec. 560. Terms of coverage.

    1. Liability. Any employer shall become liable for contributions under this article if he has paid remuneration of three hundred dollars or more in any calendar quarter, except that liability with respect to persons employed in personal or domestic service in private homes shall be considered separately and an employer shall become liable for contributions with respect to such persons only if he has paid to them remuneration in cash of five hundred dollars or more in any calendar quarter. Such liability for contributions shall commence on the first day of such calendar quarter. An employer who, by operation of law, purchase or otherwise becomes successor to an employer liable for contributions shall become liable for contributions on the day of his succession. This provision shall not affect such successor`s liability as otherwise prescribed by law for unpaid contributions due from his predecessor.

    [...]

      1. Employer. Any employer not otherwise liable for contributions under this article as an employer may become liable therefor

    (a) as of the first day of any calendar quarter, provided

    (1) he files an application with the commissioner to elect coverage for at least the unexpired portion of the calendar year in which such coverage is to commence and the following calendar year;
    (2) such application is filed on or before the last day of the calendar quarter in which coverage is to commence; and
    (3) the commissioner approve such application in writing;

    (b) as of the date on which he acquired the organization, trade or business, in whole or in part, of another employer who is liable for contributions, provided

    (1) he files an application with the commissioner to elect coverage for at least the unexpired portion of the calendar year in which such acquisition occurs and the following calendar year;
    (2) such application is filed within thirty days following the end of the calendar quarter in which such acquisition occurred; and
    (3) the commissioner approve such application in writing.

    2. Employees.(a) Services without the state. The services of a person who resides within this state but performs such services entirely without the state shall be deemed employment within the meaning of this article whenever

    (1) contributions are not required with respect to such services under an unemployment compensation law of any other state or of the United States; and
    (2) his employer makes application to this effect; and
    (3) the commissioner approves such application in writing.

    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

      by Anonymous Coward on Thursday October 31 2019, @10:51PM (#914368)

      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.