$15 Minimum Wage Damages NYC Restaurant Scene
The $15 minimum wage policy is giving New York City a major dose of economic reality.
New York City restaurants are eliminating jobs, reducing employee hours, and raising prices due to the higher costs of the $15-per-hour minimum wage.
The New York City Hospitality Alliance, a business association that represents restaurants in the city, claims that the restaurant industry in NYC is on the decline.
According to Andrew Rigie, the executive director of the trade association, “full-service restaurants recorded a 1.6 percent job loss, which is the first recorded annual loss in two decades.”
The New York City Hospitality Alliance’s revealed that approximately a third of respondents will reduce jobs and raise prices this year due to the $15 minimum wage that the New York state government enacted.
The survey found that 76.5 percent of full-service restaurants which responded ended up reducing employee hours, and 36 percent got rid of jobs.
Additionally, 75 percent of limited-service restaurants stated that they plan on reducing employee hours, and 53 percent will eliminate employment opportunities in 2019 due to the government-imposed wage policy.
New York’s governing class still believes the $15 minimum wage is the way to go.
Governor Andrew Cuomo, through a spokeswoman, defended New York’s minimum wage law:
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 Hospitality Alliance concluded that, “The results of this survey, and other industry trends, signal that a once-growing industry responsible for hundreds of thousands of jobs and billions of dollars in economic impact has become stagnant.”
New York’s economic policies have garnered significant criticism from various free market economists during the past few years.
Not only has the state of New York adopted a similar income tax scheme to the federal government, but it has also doubled down with regulations, spending, and other questionable policies like a $15 minimum wage.
William P. Ruger and Jason Sorens’s Freedom in the 50 States rankings provide an unflattering image of New York’s fiscal policies:
New York’s local tax burden is twice that of the average state: 8.5 percent of income in FY 2015. This is a dramatic rise from the early 2000s when it was 7 percent.
The state’s tax burden totals “a projected 6.8 percent of income in FY 2017”. Additionally, New York’s debt is the highest in the country standing at 31.2 percent of income. Given these factors, New York finds itself ranking last in fiscal freedom according to this report.
On top of that, New York falls in last place for overall regulatory policy rankings. When adding New York’s $15 minimum wage into the mix, the state has an explosive cocktail of government intrusion in the economy.
As a result, citizens are voting with their feet. In the same report, it was noted that in “the calendar year 2015–16 alone, 166,000 more people moved from New York to another state than moved in.”