New York minimum wage hike blamed for worst restaurant job loss in 20 years, rising costs
The New York Post reported on an online survey from the New York City Hospitality Alliance, which represents NYC restaurants, a survey which found a spike job losses were due to the minimum wage hike to $15 per hour.
Andrew Rigie, NYCHA’s executive director, told the Post that in 2018, “full-service restaurants recorded a 1.6 percent job loss, which is the first recorded annual loss in two decades.”
The survey also found that nearly one-third of respondents planned to “eliminate jobs” and a majority would raise prices due to the increased minimum wage, which took effect on December 31, 2018.
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“For some of these businesses, the minimum wage hikes tip the balance between staying in business and going out of business,” Panos Mourdoukoutas, professor of economics at LIU Post in New York, wrote in Forbes.
It’s noteworthy that the worst is yet to come as this data is rooted in the news that the wage hike “was coming” and more problems appear to be coming.
“A total of 76.5 percent of full-service restaurant respondents reduced employee hours, and 36 percent eliminated jobs in 2018,” the Post reported of the survey. “Also, 75 percent of limited-service restaurant respondents reported that they will reduce employee hours, and 53 percent will eliminate jobs in 2019 as a result of the wage increases, according to the survey.”
A spokeswoman for Gov. Andrew Cuomo (D-NY), defended the policies by claiming that they helped workers.
“All New Yorkers deserve to make a living wage and under the governor’s leadership, more minimum-wage workers than ever before have received an increase in their wages. The fact is that increasing the minimum wage puts more money in the pockets of hardworking New Yorkers, which creates more demand for local businesses and increases economic activity,” the spokeswoman told the Post.
“The economists also looked at rates of entry, or how many people, who did not work before and have no skills, entered the labor market following the wage increase,” Quartz reported of the survey. “The estimate that right after the minimum wage went up, entry rates flattened and eventually fell as the minimum wage went up further, suggesting less experienced workers were offered fewer opportunities for work. Meanwhile, in neighboring counties, entry rates continued to increase before leveling off in 2017.”
