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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 Mykl on Friday November 01 2019, @02:45AM (3 children)
It's very simple. The most important dollar figure for the customer, when it comes to it, is the final amount of money they end up spending at the restaurant. Let's say that I bought a $20 meal and tipped $3 - I'm up for $23. Now instead, let's charge the customer $23 but explain that tips are not required - the customer still only pays $23. The waiter gets no tips, but has a higher base wage and ends up with about the same amount of take home pay.
Total cost to customer remains steady. Business cost remains steady. Waiter income remains steady (but predictable). Fast food workers and behind-the-scenes workers (e.g. dishwashers) end up with better conditions. This actually benefits the small restaurant/diner, because their food becomes better value versus fast-food chains (who have to pay their workers more and therefore increase the cost of food, meaning the customer pays relatively more to visit McDonalds etc).
(Score: 2) by JoeMerchant on Friday November 01 2019, @02:07PM (2 children)
The European way (and, better, IMO...) Here in 'murica, you got the power when you sit down to a meal, staff don't kiss your ass and properly, it's entirely your option to walk out on 'em without pay - not the restaurant owner, now, you don't pay him and you end up in jail, but the ones you see face to face, for that 40 minutes you're sitting at the table, you OWN them.
🌻🌻 [google.com]
(Score: 2) by Mykl on Sunday November 03 2019, @11:55PM (1 child)
Socially, Americans will almost never stiff the waiter a tip, even if they weren't that happy with the service, because "it's expected". It somewhat reduces the leverage that the diner has when it's assumed that a tip will be coming almost regardless of service level.
Diners in non-tipping countries still have a way to register their disgust with poor service - complain to the manager.
(Score: 2) by JoeMerchant on Monday November 04 2019, @12:34AM
Economically, American service staff will almost never do something worthy of a tip stiffing... maybe one time in a thousand have I been served by a waiter/waitress who was so blatantly bad that they deserved nothing for their service, but, it does happen, and more often than actually receiving bad service I have had the manager replace our wait-person with another who could do the job better.
Now, in St. Maarten, we had a bartender come, take our order, forget about us for 90 minutes, laugh about roaches crawling around on the table, and finally when we managed to grab him and remind him, rush our food out with some parts cold (like ice crystals from the freezer) and other parts having been retrieved from an extended stay under the heat lamp. There is a man who gets no tip from us, I'm sure he was getting plenty of tips from his alcohol drinking customers.
🌻🌻 [google.com]