By: Justin Credible
The NY Post reported that local restaurants are cutting staff hours and even closing kitchens as they struggle to shoulder the extra payroll costs associated with the new minimum wage laws.
Since the $15-an-hour minimum wage hit New York City in December, Liz and Nat Milner, owners of Gabriela’s Restaurant and Tequila Bar, a margarita and taco staple on the Upper West Side for the past 25 years told the N.Y Post. they’ve been forced to slash their full- and part-time staff to 45 people from 60. Quality has suffered, they admit, and customers have noticed: They’re not coming in like they used to, and when they do, they’re spending less.
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. This contradicts a recent new study released by the Center for New York City Affairs at the New School. The study suggests that the restaurant industry has not been negatively impacted by the state’s increased minimum wage, tip wage, and other costly new mandates.
Mises Foundation, a free market thinks tank’s research revealed that while the study claims that the data “clearly shows that the large wage floor rise did not diminish various indicators of restaurant performance, including job growth,” their own data shows otherwise.
They claim that while there was significant growth in restaurant employment between 2016 and 2017, growth from 2017 and 2018 stagnated to a slower rate than non-restaurants. This would seem to contradict the authors’ findings from the heavily published report from The New School.
“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.”
In just the last three months of last year, 4,000 workers lost jobs at full-service restaurants, Bureau of Labor Statistics data show.
By the end of last year, there were fewer restaurant workers in the city than in November 2016. Even though overall employment climbed by more than 163,000, according to Investors Business Daily. Job loss was shown to increase as the new law was about to be passed at the end of the year.
Mises also pointed out that significant growth in automation in cities like New York, in part due to the increasing cost of labor.
From the proposed elimination of the restaurant tip credit in NYS, to new requirements for paid vacation time in NYC–these policies threaten to make it more challenging to run a successful business in NYC and accelerates this job loss even further. We will continue working with our elected officials and others to create a better business environment and try to ensure that we don’t drive small businesses out of NY and add even more vacant storefronts across the five boroughs, The NYC Hospitality Alliance stated on their website after conducting a survey that included operators of 324 full-service restaurants in NYC and showed that 76.50% of respondents reduced employee hours and 36.30% eliminated jobs in 2018 in response to mandated wage increases.
