Restaurants in NYC Forced to Cut Staff After Min. Wage Hike
New York City was among several jurisdictions to start the New Year with a minimum wage hike.
Now, some of the workers who campaigned for the increase are out of a job.
Starting December 31st, the minimum wage in some areas of New York City increased from $13 to the coveted $15.
It was the third hike since 2016, when the minimum wage jumped to $11 an hour.
The new policy, which applies to restaurants with at least 11 employees, has been particularly difficult for businesses who depend on tips to supplement lower wages. According to reports, 75% of restaurants in the area are planning to reduce employee hours. Nearly 80% will increase menu prices and 47% will cut jobs.
“We lost control of our largest controllable expense,” explains Jon Bloostein, who owns six restaurants in NYC. “So in order to live with that and stay in business, we’re cutting hours.”
To maintain profits, Bloostein also had to alter employee start times, increase menu prices, and stop using hostesses.
“As a result [of the minimum wage hike], it will cost more to dine out,” says Bloostein. “It’s not great for labor, it’s not great for the people who invest in or own restaurants, and it’s not great for the public.”
The same effects have been reported in Seattle, which in 2014 became the first city in the US to adopt the $15 minimum wage.
For New York, the problems will only get worse as the policy expands to cover the entire city (and potentially the entire state).
The minimum wage for small employers in NYC jumped from $12 to $13.50 last month and will hit $15 by the end of the year. The minimum wage in Long Island increased from $12 to $13 and will reach $15 by 2021.