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NYC Businesses Struggling After $15 Minimum Wage Results In Layoffs, Understaffing

Courtesy of ZeroHedge. View original post here.

It’s been over six months since New York City implemented a mandatory $15 minimum wage, and businesses are already starting to struggle with the increased labor costs, according to Fox News

They’re cutting their staff. They’re cutting their hours. They’re shutting down,” says Queens Chamber of Commerce president, Thomas Grech – who reports seeing an uptick in small business closures over the past six to nine months. 

“It’s not just the rent.” 

Bronx Chamber of Commerce president Lisa Sorin notes that the increase has hurt small businesses the most, while Manhattan employers and their customers can afford to pay more to compensate. “It’s almost like a whirlwind of keep up or get out,” she said. 

This dynamic is reflected in a new survey reported by Gothamist, which reveals that NYC restaurants are ‘thriving’ amid the $15 minimum wage, but acknowledges “Nearly 50 percent of respondents to the Hospitality Alliance’s survey said they would have to eliminate jobs in 2019 to make do.



MIKE DRESSER / FLICKR via Gothamist

Meanwhile, National Interest notes that from the same survey, “Roughly 77 percent of NYC restaurants have slashed employee hours. Thirty-six percent said they had to layoff employees and 90 percent had to increase prices following the minimum wage hike, according to a NYC Hospitality Alliance survey taken just one month after the bill took effect.”

These small businesses are trying to find creative ways to cope with the crunch without laying anyone off. 

Susannah Koteen, owner of Lido Restaurant in Harlem, said she worries about the impact raising wages could have on her restaurant, where she employs nearly 40 people. She hasn’t had to lay off anyone, but the increase has forced her to cut back on shifts and be more stringent about overtime. She said she changes her menu offerings seasonally and raises prices more often since the wage boost. -Fox News

What it really forces you to do is make sure that nobody works more than 40 hours,” said Koteen. 

And according to New York City Hospitality Alliance director Andre Rigie, restaurants and other establishments with less disposable income have become challenged - and are all experiencing changes in customer habits. He suggests that state and local governments should try and mitigate the crunch with tax incentives – as well as preserving the so-called ‘tip credit,’ which allows restaurants to count some or all of an employee’s tips towards its minimum-wage contributions. 

“Many people working in the restaurant industry wanted to work overtime hours, but due to the increase, many restaurants have cut back or totally eliminated any overtime work,” said Rigie. “There’s only so much consumers are willing to pay for a burger or a bowl of pasta.”


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