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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: 1) by khallow on Monday November 04 2019, @03:40AM (3 children)
Food which they can eat. There's not much point to the argument when that money buys a lot of food, shelter, etc.
(Score: 2) by JoeMerchant on Monday November 04 2019, @02:33PM (2 children)
Does it, though?
Florida minimum wage: 8.46 USD per hour
Minimum rent in Jacksonville seems to be around $500 per month, or ~60 hours of work (neglecting taxes): https://www.trulia.com/for_rent/Jacksonville,FL/0-500_price/ [trulia.com]
Cost of food for 1, top Google result: $250 per month, or ~30 hours of work. https://www.google.com/search?q=average+grocery+bill+for+1&ie=UTF-8 [google.com]
So, if you're lucky enough to get full time employment, that's ~$1350 per month, with $750 right off the top for minimal food and shelter - $600 left over to handle transportation, clothing, emergency expenses. To secure that full time employment, and be able to shop for economical food and clothing, you're either going to need a car, or spend the remainder of your non-working waking hours on public transit, going with the car option, top Google result is $2500 per year in Florida, or another $210 per month.
Down to $390 per month now, revisiting taxes, just FICA is 7.65% (quite the bargain, considering you'll probably be needing social services multiple times before retirement), there's $100 per month gone, down to $290 now - and you're still naked.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end
(Score: 1) by khallow on Tuesday November 05 2019, @02:37AM (1 child)
So even at minimum wage - which most people are earning more than, that's pretty damn good.
Or split the rent and food costs with other people and drive a used car. It's not rocket surgery.
(Score: 2) by JoeMerchant on Tuesday November 05 2019, @02:30PM
No, what it is is scraping bottom. Some wizard somewhere came up with a "minimum emergency fund" figure of $2200ish. Without that much cash cushion, you can expect to encounter typical, probable emergency situations which require that much money, and will be a whole lot more expensive if you don't have that much money readily accessible somehow. The above analysis, neglecting clothing or any other "unnecessary" expenses, would require 10+ months of savings to build up such a princely emergency fund.
Sure, we can shack up with other working poor, 4 to a bedroom - no chaos or added risk / expense in doing that, is there? Your idea of sharing transportation sounds good, but that's the dopeler effect - it only sounds good coming at you real fast, once you look at the overall expense profile, owning your own transportation is a very cheap thing compared to the risks to employment and time costs of not having control of your own transportation, plus - you can work Uber/Lyft in your spare time for that awesome extra $30 per month of net income - assuming you're immortal and $1.25 net profit per hour is worth more than the risk of injury while driving to you - you did get comprehensive health coverage in that minimum wage job, didn't you?
By the way, $2500 per year is the net expense of a used car, not a new one. Little things like legally required insurance take up almost half of that, fuel and maintenance costs of driving 100 miles a week eat up the rest. New cars have lower maintenance and sometimes lower fuel costs, but way more than make up for that in depreciation.
Україна досі не є частиною Росії Слава Україні🌻 https://news.stanford.edu/2023/02/17/will-russia-ukraine-war-end