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In liberal New York City, business owners say labor costs have forced cuts in jobs and work shift and prices too have been raised. Big surprise.
More than six months after the $15 minimum wage went into effect in New York City, business leaders and owners are feeling the squeeze. Many say these changes were unintended consequences of the new minimum wage, which took effect at the beginning of the year.
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 yet, 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. There is little profit margin for restaurant owners, but the public thinks they're all rich.
“What it really forces you to do is make sure that nobody works more than 40 hours,” Ms. Koteen said. “You can only cut back so many people before the service starts to suffer.”
Ms. Koteen said she shelved plans to move her restaurant to a larger location. That would require her to hire more staff, and she isn’t willing to take the risk with the unpredictability of her business. “You would just have no choice but to cut people at the bottom,” she said.
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 yet, 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. There is little profit margin for restaurant owners, but the public thinks they're all rich.
“What it really forces you to do is make sure that nobody works more than 40 hours,” Ms. Koteen said. “You can only cut back so many people before the service starts to suffer.”
Ms. Koteen said she shelved plans to move her restaurant to a larger location. That would require her to hire more staff, and she isn’t willing to take the risk with the unpredictability of her business. “You would just have no choice but to cut people at the bottom,” she said.
About 80 percent of restaurants go out of business in New York every year, but now we can expect that number to increase and the number of new restaurants opening each year to decrease. People just don't want to take the large risk the minimum wage creates.
Sarah McNally, owner of McNally Jackson Books, says, ‘There’s absolutely no benefit to being a retail business in New York.’ PHOTO: SARAH BLESENER FOR THE WALL STREET JOURNAL
In June, the city’s unemployment rate was 4.3%, compared with the state’s unemployment rate of 4%, according to the New York State Department of Labor. Both numbers have remained fairly steady over the past year.
New York City’s minimum wage has increased three times for employers with at least 11 employees in the past three years, the Wall Street Journal reports. At the end of 2016, the hourly rate rose to $11 from $9 an hour. In 2018, the minimum wage jumped to $13 from $11 an hour. The rate will increase to $15 an hour for employers with 10 or fewer workers at the end of 2019.
The current federally mandated minimum wage is $7.25 an hour. Other states have passed $15-minimum-wage legislation, including Massachusetts, California, Maryland, Illinois, New Jersey and Connecticut.
Sarah McNally, owner of McNally Jackson Books, employs 75 people at four shops in Manhattan and Brooklyn. Ms. McNally said she hasn’t cut hours or reduced the number of people she employs to mitigate the increase, but she is working to open two more shops and scale her workload to stay profitable.
In June, the city’s unemployment rate was 4.3%, compared with the state’s unemployment rate of 4%, according to the New York State Department of Labor. Both numbers have remained fairly steady over the past year.
New York City’s minimum wage has increased three times for employers with at least 11 employees in the past three years, the Wall Street Journal reports. At the end of 2016, the hourly rate rose to $11 from $9 an hour. In 2018, the minimum wage jumped to $13 from $11 an hour. The rate will increase to $15 an hour for employers with 10 or fewer workers at the end of 2019.
The current federally mandated minimum wage is $7.25 an hour. Other states have passed $15-minimum-wage legislation, including Massachusetts, California, Maryland, Illinois, New Jersey and Connecticut.
Sarah McNally, owner of McNally Jackson Books, employs 75 people at four shops in Manhattan and Brooklyn. Ms. McNally said she hasn’t cut hours or reduced the number of people she employs to mitigate the increase, but she is working to open two more shops and scale her workload to stay profitable.
If the minimum wage has no impact on staffing and prices, why not raise the wage to $100 an hour or even $200 an hour? That's a real living wage.
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