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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: 3, Touché) by Ethanol-fueled on Friday November 01 2019, @12:01AM (6 children)

    by Ethanol-fueled (2792) on Friday November 01 2019, @12:01AM (#914390) Homepage

    All you math nerds are talking quantitative solutions when I can solve almost all the United States' problems in only a few lines of text: This is how we will Make America Great Again!

    1 - Revoke all foreigners' work visas (unless those foreigners are making >= 200,000 dollar salaries) and immediately deport the motherfuckers
    2 - Immediately deport all illegals, by force if necessary, or force them to work in labor camps for 3 hots and a cot.
    3 - Mandatory e-verify for all employers, imprisonment for employers who violate those laws.
    4 - Allow only American citizens to own American property
    5 - Outlaw political lobbying and treat violation of those laws as treason
    6 - Mandate that all dual-citizens renounce their non-American citizenship or face deportation to their other nation of citizenship
    7 - Conduct a census after the previous rules have been implemented and executed

    Then America will return to its former glory as a paradise-on-Earth.

    Starting Score:    1  point
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    Total Score:   3  
  • (Score: 1) by fustakrakich on Friday November 01 2019, @12:18AM

    by fustakrakich (6150) on Friday November 01 2019, @12:18AM (#914395) Journal

    Then America will return to its former glory as a paradise-on-Earth.

    "Don't let it be forgot, that once there was a spot, for one brief shining moment, that was known as Camelot."

    --
    La politica e i criminali sono la stessa cosa..
  • (Score: 1) by khallow on Friday November 01 2019, @01:49AM

    by khallow (3766) Subscriber Badge on Friday November 01 2019, @01:49AM (#914427) Journal
    That didn't make America great the first time. Just saying.
  • (Score: 2) by JoeMerchant on Friday November 01 2019, @02:16PM (2 children)

    by JoeMerchant (3937) on Friday November 01 2019, @02:16PM (#914580)

    Allow only American citizens to own American property

    The others will already have hillariously disasterous effect on the U.S. economy, but that ^^^ one is an instant guaranteed market crash.

    Maybe the Federal government can seize all foreign owned property and slowly sell it back into the domestic market without crashing the price, like they used to do for cheese?

    --
    🌻🌻 [google.com]
    • (Score: 1) by Ethanol-fueled on Friday November 01 2019, @06:10PM (1 child)

      by Ethanol-fueled (2792) on Friday November 01 2019, @06:10PM (#914714) Homepage

      " The others will already have hillariously disasterous effect on the U.S. economy "

      We have a lot of unemployed recent and not-so-recent grads (almost all of whom are more capable than an H1-B at less of a cost) who, if employed, will spend all there money here rather than send huge chunks of it overseas. How is that going to hurt our economy again?

      • (Score: 2) by JoeMerchant on Friday November 01 2019, @08:05PM

        by JoeMerchant (3937) on Friday November 01 2019, @08:05PM (#914790)

        How is that going to hurt our economy again?

        Oh, how about the same way that isolationism has always hurt every economy in the history of money?

        almost all of whom are more capable than an H1-B at less of a cost

        You know, I went to University with a mix of foreign and domestic students, and I continue to see what comes out of the Universities and into the workforce. First observation: the H1-Bs almost always work for less. Second observation: the H1-Bs far less often take an entitled position with Dilbert's Wally style work output while expecting full pay and benefits. Third observation: in just about every field other than speaking English and understanding the nuances of local redneck culture, the H1-Bs held their own and usually exceeded performance of the domestics. I wouldn't hire one to sell used cars, but if I needed an employee who actually accomplishes something for the company, I'd put better than even money on the H1-Bs, when they're available.

        --
        🌻🌻 [google.com]
  • (Score: 0) by Anonymous Coward on Friday November 01 2019, @02:31PM

    by Anonymous Coward on Friday November 01 2019, @02:31PM (#914586)

    Ok, I'm all for 3, 4 could be good (it seems to work for China).

    5, well, that one is downright unconstitutional (the constitution says people can petition the government for remission of grievances, that is, they can lobby for changes).