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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: 2) by isostatic on Friday November 01 2019, @10:54AM

    by isostatic (365) on Friday November 01 2019, @10:54AM (#914521) Journal

    You'd think that was the case. In which case it's good that shitty resturants that cant afford to pay staff or rent shut down.

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