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JoeMerchant [soylentnews.org] writes:

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 [marketwatch.com] why this might be true.

What hasn’t happened
When worker pay goes up, employers can respond in a number of different ways. They can cut hours, lay off workers, accept smaller profits or raise prices.

With profits so low in the restaurant industry, averaging just 3%-5%, employers may not have the option to accept less in profits without going in the red.

In many industries, increased labor costs may prompt businesses to lay off American workers and move operations overseas where labor costs are lower. But this isn’t a viable solution in the restaurant industry, since most of the work is done on-site.">suggests a few reasons why this might be true.

What hasn’t happened

When worker pay goes up, employers can respond in a number of different ways. They can cut hours, lay off workers, accept smaller profits or raise prices.

With profits so low in the restaurant industry, averaging just 3%-5%, employers may not have the option to accept less in profits without going in the red.

In many industries, increased labor costs may prompt businesses to lay off American workers and move operations overseas where labor costs are lower. But this isn’t a viable solution in the restaurant industry, since most of the work is done on-site.

Minimum wage: government acting as organized labor for labor pools too disorganized to do it for themselves.

Original Submission