New York City Businesses Struggle to Keep Up After Minimum Wage Increase

[oldsoftie]

This discussion thread was locked as off-topic by Omaha Steve (a host of the Latest Breaking News forum).

Source: WSJ

More than six months after the $15 minimum wage went into effect in New York City, business leaders and owners say the increased labor costs have forced them to cut staff, eliminate work shifts and raise prices.
Many business owners said 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, 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.

“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.

Read more: https://www.wsj.com/articles/new-york-city-businesses-struggle-to-keep-up-after-minimum-wage-increase-11565035475

[dchill]

1. Wall Street Journal. Owner: Rupert Murdoch.

NISM?

[aggiesal]

2. This is hard for me to believe ...

Every time wages go up, people spend their increase not keep.
So there should be more money in circulation

Is this a hit piece on higher wages?

[Princetonian]

3. Yup. Look at the news source. Faux News ally and Chump endorser.

[jmowreader]

11. Yes, they do that

Problem is, they don't necessarily spend it at your store.

[mr_liberal]

4. Bernie Sanders campaign announces it will cut hours to pay staffers $15 minimum wage

https://www.kusi.com/bernie-sanders-campaign-announces-it-will-cut-hours-to-pay-staffers-15-minimum-wage/

[msongs]

5. subscription required to read article nt

[Hoyt]

6. Don't doubt some businesses have a problem, but greater good probably worth it.

[forgotmylogin]

10. Business is a struggle whether you treat your workers fairly or not.

Goodness, it means people can't work more than 40 hours and don't need to take the overtime bribe? Sounds like this business couldn't even afford more workers at a lesser rate. It's smart for her *not* to expand.

[cstanleytech]

7. Surely they could come up with a formula that takes into account the profits the employer

is earning and the number of employees they have and then link it to their taxes and spike the taxes higher on companies that earn a bundle in profits but pay their employees measly wages.
Companies then that are not earning well could be given a break so they are not burdened to badly.

[aeromanKC]

8. Reminds me of Papa John getting his panties in a bunch about the 25 cent/pizza price raise for ACA

Of course prices will rise a few pennies or small %, but it's a small investment for a better society and overall better economy.

[BigmanPigman]

9. Interesting, I just read Chef Anfrew Zimmern's twitter

and saw something related to this.

@andrewzimmern
Truth... and it’s happening in many areas in large cities

@nickkokonas
Replying to @pete_wells
The labor contracts in there make it nearly impossible to run a restaurant well or profitably.

[Farmer-Rick]

20. Yeah, restaurants are one of the lowest paying jobs you can get.

Most, of the time workers rarely even make minimum wage because of a lot of loop holes in labor laws. Just paying a tip is a loophole so that employers don't have to pay full minimum. What other industry allows customers to decide if their employees will get a decent salary?

Poorly run restaurants are not entitled to cheap labor. Cheap labor is NOT a constitutional right. Labor intensive businesses like farming and restaurants need to adjust. That's why as a small farmer, I'm always looking for labor saving devices and methods.

[YOHABLO]

12. I don't know about NY, but most restaurants only pay there wait staff 2.13 per hr.

The back of the house, food preps, cooks, dishwashers etc. make minimum wage. Most waiters don't work a 40 hr week.

[DeminPennswoods]

13. Here in my small, beat down rust belt town,

the local Walmart is starting jobs at $12/hr with benefits. They have a big banner hung on the outside of their local store advertising this. The local Aldi is starting at nearly $12/hr. Are NYC businesses really paying less than a poor area like mine?

[Opel_Justwax]

14. If you can't afford to pay your workers a living wage then shut your doors.

This capitalist propaganda.

[SunSeeker]

15. It's immoral to pay anyone less than $15/hour in NYC.

I really don't know how anyone can live in NYC on $15/ hr, let alone less than that.

[Voltaire2]

16. 15 in NYC is not a living wage.

So like the WSJ can fuck off with its anecdotal bulkshit.

[procon]

17. The more money that employers pay their workers

up front means less money taxpayers will have to pay in public assistance. Employees earning higher wages have more money to spend and will pay more in taxes.

It only makes sense that a higher minimum wages, while have a negative effect on struggling businesses that are already in serious trouble, will have a beneficial effect on the overall community.

I understood that this was how real economic engine of middle class capitalism was supposed to work... That lifting all boats thing. When even those on the lowest rung of the economic ladder rise, everyone above them also rises as well.

This is the direct oppose of our current form of laissez-faire capitalism where the government plays a cruel game of reverse Robin Hood by transferring wealth from the middle class to the wealthiest top teir. Suppressed wage growth plays a large part in destroying the buying power of the middle.

[Farmer-Rick]

18. Well, if your business is based on cheap labor and under paying workers

Then maybe you should move over and let others do the job.

No one has a right to cheap labor.

[Tom Rinaldo]

19. About overtime pay

So if people get a significant raise that allows them to earn the money they need with a 40 hour work week rather than having to work extra hours in order to get by, somehow that doesn't strike me as an inherent problem. It strikes me more as achieving the goal.

[Roy Rolling]

21. WTF

Of course there will be adjustments. The biggest adjustment is those employees can now afford to shop at the stores they work in.

No pain, no gain.

[Omaha Steve]

22. After a review by forum hosts....LOCKING

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