New York Businesses Feel The Full Brunt Of Minimum Wage Increases

​Back in March, I wrote an article of a similar nature talking about New York Governor Andrew Cuomo having raised the minimum wage in a bill that went into effect in December of last year. The bill forced New York businesses to raise their minimum wage to $15 an hour, that shiny number the Left seems to be in love with (until they start advocating for $20 and then $25 and so on and so forth until they bleed small businesses completely dry and eliminate any possibility of a free market).
 
And back in March, I shared with you some statistics from New York City Alliance, in a survey that was published towards the end of 2018. To joggle your memory, they found that “76.50% of full service restaurant respondents reduced employee hours, and 36.30% eliminated jobs in 2018… 75% of limited service restaurant respondents report that they will reduce employee hours, and 53.10% will eliminate jobs in 2019 as a result of mandated wage increases that took effect on December 31, 2018… When the tip wage increased 50% in 2015, and since doubled, annual employment growth dropped from 6.67% to less than 1% as of November 2018.”
 
So in 2018, before the most recent hike took place, nearly 77% of New York restaurants had to reduce employee hours and roughly 36% had to eliminate jobs, with 75% saying they would reduce employee hours and 53% saying they would eliminate jobs in 2019.
 
And in a more recent survey, one that was taken a month after the bill took effect, “[R]oughly 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 The National Interest who quoted an NYC Hospitality Alliance survey.
 
A month after the bill took place, 77% of restaurants had to reduce employee hours. The layoffs were considerably less than was predicted (53%) but sits at around the same number as the 2018 one. And in the last three years, New York City increased its own minimum wage three times (for employers with at least 11 employees), according to The WSJ. “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.”
 
So year after year, the New York City government increases the minimum wage for businesses that are not making enough of a return to be able to pay their employees that sort of wage with the hours that they currently give them. This creates the sort of circumstances where restaurants and other businesses have to slash employee hours, if not outright eliminate positions, in order to stay afloat.
 
And multiple business owners have voiced their concern over this sort of thing.
 
Susannah Koteen, who owns a restaurant in Harlem, told The WSJ: “What it really forces you to do is make sure that nobody works more than 40 hours. You can only cut back so many people before the service starts to suffer.”
 
Sarah McNally, who owns a bookstore in NYC, told The WSJ: “With raising minimum wage to living wage, it feels now like we’re at the bottom of the pay spectrum. There’s absolutely no benefit to being a retail business in New York.”
 
The thing about the minimum wage being a “living wage” is that it’s nothing more than a Leftist narrative. First of all, minimum wage was never expected or intended to be a “living wage”. People generally aren’t expected to be such bottom-feeders that they can only achieve minimum wage jobs and expect to live their entire lives off of such wages. Not to offend anyone who might have a minimum wage job, but there isn’t a single person with one that wouldn’t rather be doing something that paid them more. To expect to be able to live off of minimum wage is slothfulness at its best.
 
Second of all, if a business can’t afford to pay its employees a minimum wage that is “livable”, artificially raising the minimum wage and forcing businesses to pay more will hurt both the business and the employees. The businesses have to cut hours, cut jobs and/or raise prices – all things no business wants to do. They want to be able to afford more work hours because more work hours means more work being done, more work being done means more productivity and more productivity means more money made. And when businesses have to raise prices, that also hurts them because people will have a limit as to how much money they will want to spend on a particular item. This hurts sales, which hurts profits, which hurts the business’s ability to keep their employees at good hours, or even at all.
 
Andrew Riggie of the New York City Hospitality Alliance put it best: “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 overtime work. There’s only so much consumers are willing to pay for a burger or a bowl of pasta.”
 
What’s more, Thomas Grech, president of the Queens Chamber of Commerce, said that small businesses were “cutting their staff. They’re cutting their hours. They’re shutting down. It’s not just the rent.”
 
When you force a business to pay more than what it actually can afford to do, they are forced to make significant changes to stay afloat. Those changes include cutting employee hours, eliminating overtime work, eliminating positions and raising prices for customers. The only reason big businesses like Amazon support minimum wage increases is because they can afford them and they know their competition can’t.
 
And despite all these things happening, despite all the people leaving New York for places with lower taxes (including AOC’s own mother leaving for Florida because of those very high taxes that AOC supports), you know perfectly well not one Democrat in that State is willing to reverse it, no matter the consequences. Demanding higher minimum wage means more votes from Millennials (even though they also suffer as a result of those high minimum wages, even more so because they don’t have as much money as older people who have worked for longer, plus they don’t have as much experience as older people) and means being generally viewed in a positive light by people from the media and other Leftist politicians.
 
Of course, if you call out the damage they are causing to their cities, you get called a racist and a white supremacist as a result, so Republicans generally shy away from that sort of thing because they have the spinal integrity of wet paper.
 
But the policies the Left always employs have dire consequences on people’s lives. There’s quite the irony in AOC calling out the poverty of New Yorkers in her district when the city has been run pretty much strictly by Democrats for years.
 
In any case, as I said in my previous article covering this subject, artificially raising the minimum wage in this manner will only bring these kinds of results. Businesses will tend to pay their employees more when they can afford to do so. It’s a good incentive to keep people motivated to work hard and perform better. The employees feel more like they earned the wages they make as opposed to feeling entitled that the government is forcing their employers to pay them more. In this way, employees get to keep their hours and their jobs, perhaps work more hours, work harder and help the business do better in the long run.
 
I may not necessarily be an expert in the making of a business, but I understand common sense. And there is nothing that is common-sensical about minimum wage increases like New York’s.
 
Proverbs 10:4
“A slack hand causes poverty, but the hand of the diligent makes rich.”
 
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Author: Freddie Marinelli.