
$15 minimum wage didn’t hurt NYC restaurants - hkmaxpro
https://www.marketwatch.com/story/the-15-minimum-wage-was-supposed-to-hurt-new-york-city-restaurants-but-both-revenue-and-employment-are-up-2019-10-28
======
joemaller1
Is the author really in Buffalo? That’s the other side of the state.

From my personal experience in nyc, and from talking to neighbors who own
restaurants, small and family owned businesses are absolutely hurting. They’ve
reduced staff, and owners are making up lost hours themselves. Delivery has
been mostly outsourced. The price of everything on the menu has gone up. A
number of lower-cost restaurants have closed completely. Whatever reported
numbers the author based this upon do not tell a complete story.

~~~
coldtea
> _From my personal experience in nyc, and from talking to neighbors who own
> restaurants, small and family owned businesses are absolutely hurting.
> They’ve reduced staff, and owners are making up lost hours themselves_

Well, if they were hurt with such a raise, perhaps they were not viable
businesses and are better closed.

The employees might lose a crappy near-subsistence job, but both the employees
and owners can then concentrate their efforts into something better...

Somehow Europe manages to have viable restaurants despite decent minimum wage
and not tips-oriented compensation...

~~~
alfromspace
What if the alternative is unemployment?

~~~
admax88q
There are such efficiencies to be have in restaurants. In Japan I went to a
curry restauraunt that was run by 2 staff. Two people did the cooking, taking
orders, collecting bills, serving food. The whole operation was two staff.

Back home I went to an equivalent size burger joint that had 6 people on staff
that I could see.

With good design and prep a curry restaurant was able to serve the same amount
of food with 1/3 the staff. They could double the wage of the staff and still
have money left over with better prep and design.

~~~
wasdfff
Plenty of places drop down staff. Taco bell cuts down to a staff of 2 during
the night shit. However, if there is any sort of rush on food, it all breaks
down.

~~~
admax88q
My point was that well designed and well run places can run during busy times
with minimal staff.

------
enobrev
I don't know a ton about the economics but my living experience lines up with
this article. At least half of my closest friends are in the service industry.
I spent most of my 20s and 30s in NYC before the wage increase. Those friends
generally couldn't afford much of anything, outside of rent and a steady
supply of cigarettes. It's the reason bartenders tend to "give the bar away"
in NYC. Because their friends can't afford much else.

Then I moved to Seattle and noticed something entirely different. Same sort of
friends - mostly service industry. And this was before the increase to $15/hr,
when it was $12/hr. What was starkly different was that our new friends could
actually afford to do things. Nice dinners, bars around town where we didn't
know the bartenders, movies, trips to Portland and Vancouver. Same jobs, but
with money to spend.

And then there's the side that was close to home. My wife was, for the first
2/3 of our relationship, a bartender. In NYC she had her good weeks, pulling
in over $2k and her bad weeks, making somewhere around $100 for the week. Hard
to say what was "normal" and impossible to predict. It was impossible to plan
around her income so I basically just asked her to give me half and it would
essentially even out. Then we moved to Seattle, again at $12/hr minimum (she
was making $17-$20 I think) and our whole situation was different. We were
already doing fine because I make a good living but now I could finally count
on her contribution. We were able to save, plan trips, etc in ways we couldn't
before because now we had a baseline amount that she would always make. The
tips we're just a cherry on top.

And then we moved to Chicago with a shitty mimimum wage for servers and my
wife left the industry entirely. She had gotten used to some stability in her
income and now with a low minimum wage for servers, there is none. Even at a
nice theater gig, she was making less than any job she had in Seattle and
again relying upon the whims of her customers rather than the stability of the
industry.

~~~
linuxftw
Retail jobs aren't meant to be bread-winner jobs. Any zero-skill job is going
to pay whatever the local market minimum is.

There are two ways to raise the minimum market wage. First is minimum wage
laws. Second is to increase labor demand or shorten labor supply.

There's clearly a surplus of no-skilled labor in the US, yet we're still
importing more of it. Businesses are capitalizing on the market conditions and
exploiting the labor surplus, that's why we're seeing the proliferation of so
many chain restaurants and and other little-to-no-value businesses.

~~~
thatfrenchguy
> Retail jobs aren't meant to be bread-winner jobs. Any zero-skill job is
> going to pay whatever the local market minimum is.

Says who ? Why is your tech job supposed to be a bread winner job ?

~~~
subject117
Says the monetary value created from a tech job vs the monetary value created
from a retail job.

------
Ensorceled
The comments on these types of articles always hurt my brain. Blaming minimum
wage increases for McDonald's, Walmart, pretty much everybody bringing in
automated tellers for instance.

I'm always bemused by the arguments against minimum wages, they almost always
boil down to "My business can't survive unless my employees are living in
poverty." which, in reality for a lot of businesses, is "I won't be as
profitable if I have to pay a living wage".

If people really believed this, there would be staged minimum wages: Walmart
pays $25 minimum while small, struggling restaurants pay $15.

~~~
AlexTWithBeard
_My business can 't survive unless my employees are living in poverty_

Another way of looking at this would be: a job in McDonalds is not supposed to
be a means of supporting the family of four. It's a side gig for teenagers,
not a "full-scale" job.

~~~
cooljacob204
That is not the reality of it unfortunately. Might be a side gig for teenage
you, but not everyone has the education or network to do better.

~~~
thrower123
That is the tragedy of the next couple decades that needs to be solved. What
do you do with the increasing share of people that do not have the
capabilities to be productive in the economy?

~~~
AlexTWithBeard
Teach a profession at school?

~~~
SketchySeaBeast
Which profession? All of them? Who pays for that sort of support in school?
And given that there are only so many hours in the day, what do we lose? Do we
need even more of our soft skills and arts removed as we build a society
solely around getting people into a career and keeping them there? Are we OK
with people who don't understand history or geography because they don't need
really need those skills as plumbers?

And wasn't a high school education good enough 50 years ago for most
positions? Companies have been able to force the burden of debt for gaining
the skills required for a job onto the individual, through exorbitant college
fees and unpaid internships, now you're advocating the government should take
on the specialization that the private industries require?

As a college student one is barely able to figure out their interests -
there's so much push to start planning well in advance, I have no idea how we
can expect a tween to commit to a career path.

------
zer0faith
As a business owner if I am required to pay my workers at minimum 15$ an hour
I will need to off set the impact to my bottom line. This can be done by:

Automate whatever can be

[https://www.forbes.com/sites/edrensi/2018/07/11/mcdonalds-
sa...](https://www.forbes.com/sites/edrensi/2018/07/11/mcdonalds-says-goodbye-
cashiers-hello-kiosks/#2eb695366f14)

Raise the price of goods and services

Outsource to other countries (if cost is cheaper)

For those that aren't aware typical rent in NYC on a corner lot for a
restaurant is about 18k per month.

~~~
jimktrains2
> As a business owner if I am required to pay my workers at minimum 15$ an
> hour I will need to off set the impact to my bottom line.

Honest question, if you're still profitable (and I read this as implying you
are), why do you need to offset it, or offset it aggressively? Sure, if it
becomes extremely tight to not-profitable, that isn't good and would need
rectified, but again, your comment doesn't come off like that.

~~~
snarf21
So who gets to decide how much profit this person is allowed to make? Maybe he
wants to save for his kids college or against a recession? He is taking the
risks (leases, capital tie up, etc.) he should be allowed to decide his
payout. Most restaurants run super lean and have high failure rates. The long
term effect of these laws is yet to be seen.

It is also unclear to me why we expect an unskilled worker at McDonald's
putting fries into a basket to make a "living wage". These jobs are largely
for students, retirees and other temporary workers. A high minimum wage isn't
the way to end poverty, no taxes under $60K, needs based UBI and other tax
incentives are much better options.

The issue is that business that employ unskilled labor will tend to raise
prices but rich people don't shop at WalMart; poor people do. So great, they
make more but their buying power may have actually gone _down_. This is the
conundrum. Everyone wants $40/hour unskilled manufacturing jobs making
throwaway products that they can buy at the dollar store. You can't have it
both ways. People really want buying power, not necessarily higher wages.

~~~
coldpie
> It is also unclear to me why we expect an unskilled worker at McDonald's
> putting fries into a basket to make a "living wage". These jobs are largely
> for students, retirees and other temporary workers.

This is utter nonsense and insulting. Go talk to people who actually work
those jobs. These people are adults, just like you are, and they deserve to be
treated with dignity. If you don't pay them a living wage, then the government
will have to make up the gap. Is that your goal?

~~~
snarf21
I'm not insulting anyone. I _actually_ worked these jobs in the past. I _know_
the people personally. And yes, if you read what I posted, I _explicitly_
stated that the government needs to make up the gap. We can tax high wage
earners and redistribute the money to them _directly_ without immediately
raising the prices at the stores they use. So I'm saying I'll personally pay
more taxes to help raise these people out of poverty. I think that is treating
people with dignity, apparently you disagree.

~~~
coldpie
You really don't see how saying one's job is "for students, retirees, and
other temporary workers" and that their work doesn't deserve a living wage
could be insulting to someone who does not fall into one of those categories
but has chosen to work that job?

~~~
Cederfjard
I mean, if a "living wage" means that you're not able to provide a net value
for your employer, or at least that other options like investing in automation
is substantially more profitable for them, it just doesn't work out. Why would
you "deserve" for someone to pay you more than what your labor is worth? They
just won't hire you then.

I agree that everyone _does_ deserve to live a dignified life and afford all
their basic needs, no matter where they work. I'm not sure that the solution
is to force employers to pay more than what they get out of you. I don't think
I've ever heard of a solution that's entirely convinced me (it seems to me to
be a very hard problem), but I'm leaning towards an UBI.

------
xracy
"According to an analysis by the Federal Reserve Bank of Chicago, if low-wage
workers have more money in their pockets, they will have more money to spend,
potentially expanding the number of consumers who can afford to eat out."

^ This seems to me to be the most brain-dead obvious response to trickle-down
economics, and income inequality. Like, More people getting money, means more
money flowing. We should tax the rich for this reason alone. Otherwise money
stagnates, and doesn't do anything. It's functionally useless. Jeff Bezos has
admitted as much saying something to the effect of "I don't know what to do
with all of my money".

~~~
chibg10
The brain-dead obvious response to this is that Jeff Bezos isn’t hiding his
money under a mattress. He’s (directly or indirectly) investing in ventures
that employ people anyway, and the mechanisms that allocate his investment
funds are possibly better at producing productivity returns than e.g. having
several thousand people eat out one extra time per month.

There are reasonable responses to the above but nothing about these
discussions appear brain-dead obvious to me.

------
tosser0001
Why is $15/hr the magic number? Just because it's some round number?

If raising the minimum wage has had nothing but positive effects, why not
raise it to $20/hr - or some other number calculated for maximum benefit - who
knows what that would be?

~~~
WhompingWindows
Do you think it'd be as snappy if Bernie was up there at the podium asking for
$14.79 per hour?

These are arbitrary numbers, when thinking on an economy-wide scale, because
$15/hr does a LOT more for someone in a small town than a big city. The point
is to pick something reasonably high, a non-starvation wage, that is also easy
to market to the masses.

I don't think economists are huge fans of $15/hr across the board, so $20/hr
would probably be abhorrent to them. But economists can be totally wrong and
still keep their jobs and respect due to the political use of economics these
days.

------
lr4444lr
The author fails to answer one of the hypotheses she raises: were hours cut?

------
barry-cotter
There may be a careful analysis of the effect of a $15 minimum wage on the
restaurant industry in New York but this isn’t it. It doesn’t mention whether
entry of low skilled workers into the industry decreased, the effect of the
change on hours worked, substitution away from labour or decreases in non-
pecuniary compensation.

It could be that every single one of these points to the minimum wage hike
having small to non-existent effects but the article reads like a brief, not
an analysis.

Compared to the Seattle minimum wage study. They had an objective study set up
and when they didn’t like the results they got some political hacks to re-
analyze the data and release their results beforehand.

[http://www.seattleweekly.com/news/seattle-is-getting-an-
obje...](http://www.seattleweekly.com/news/seattle-is-getting-an-object-
lesson-in-weaponized-data/)

> Two weeks. Two studies on minimum wage. Two very different results.

> Last week, a report out of the University of California—Berkeley found
> “Seattle’s minimum wage ordinance has raised wages for low-paid workers,
> without negatively affecting employment,” in the words of the Mayor’s
> Office. That report, produced by the Center on Wage and Employment Dynamics
> at Berkeley, was picked up far and wide as proof that the doomsday scenarios
> predicted by skeptics of the plan were failing to materialize.

> And while another study that came out Monday from researchers at the
> University of Washington doesn’t exactly spell doomsday either, it wasn’t
> exactly rosy. “UW study finds Seattle’s minimum wage is costing jobs,” read
> the Seattle Times headline Monday morning. The study found that while wages
> for low-earners rose by 3 percent since the law went into effect, hours for
> those workers dropped by 9 percent. The average worker making less than $19
> an hour in Seattle has seen a total loss of $125 a month since the law went
> into effect.

Edit: RickJWagner points out

[https://news.ycombinator.com/item?id=21386070](https://news.ycombinator.com/item?id=21386070)

> business owners ... say the extra money comes with an unforeseen cost:
> higher good prices, fewer working hours and layoffs.

> “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 any overtime work,” Andrew Riggie, executive director of the New
> York City Hospitality Alliance, told Fox News. “There’s only so much
> consumers are willing to pay for a burger or a bowl of pasta.”

> Roughly 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 a NYC Hospitality
> Alliance survey taken just one month after the bill took effect.

[https://nationalinterest.org/blog/buzz/new-york-
city’s-15-mi...](https://nationalinterest.org/blog/buzz/new-york-
city’s-15-minimum-wage-now-officially-disaster-71761)

~~~
mc32
I guess some studies don’t actually focus on what matters )hours worked/take
home pay) but would rather build s narrative even if the on the ground effects
of the narrative are counter what they say they are and actually adversely
affect those they presumably want to help.

------
edanm
There's a certain assumption that minimum wage advocates have that I don't
really connect with. The idea is that of the _business_ having responsibility
for making sure their employees have a "living wage".

Why is it on the business? This seems like such an old-school, patronizing
view of the relationship between a business and its employees. It's a business
transaction between two parties - nothing more. If we as a society believe
that people shouldn't be earning so little money, then fine - we can tax
richer people and give the money to people making less. But that's on
_everyone_ in the society, not just the specific business owners that just
happen to employ these specific workers.

------
9HZZRfNlpR
I don't understand why people still tip if they make 15 per hour. As it writes
in the article they have tip credit but the employer would still have to cough
that 15 bucks if they didn't make enough in tips.

~~~
remon
Less tip = more cost employer = higher prices. One way or the other you're
roughly paying the same, only in a way that does not incentivise good service
as much.

~~~
jfk13
If tipping is necessary to incentivise good service (i.e. workers doing their
job properly), why isn't it the norm in every job?

~~~
alkonaut
Most countries have restaurant tips, but afaik only the US has it as a
standardized part of the prices and actually a part of the staffs pay.

I get good service in restaurants because it's their job, but I can tip 0-10%
if the service is beyond what I expect.

The important thing isn't that the pay is guaranteed for staff that doesn't
provide good service, what's important is that their pay is guaranteed _even
if there are no customers_. Bringing in customers isn't the job of waiting
staff (apart from providing good service) - so their pay should never depend
on it.

~~~
PeterStuer
"Most countries have restaurant tips"

That is not true.
[https://en.wikipedia.org/wiki/Gratuity](https://en.wikipedia.org/wiki/Gratuity)

~~~
alkonaut
I think that map at least very few countries have it as something
unknown/surprising/frowned upon. I do consider the “round up bill/not
expected” we have where I live as definitely “having restaurant tip”

~~~
PeterStuer
Round up the bill has mostly sunset with the advent of electronic card
payments.

------
voyager2
When I started washing dishes, minimum wage was $1.50. Hard to get used to
inflation of 1000%.

~~~
ainiriand
Oh my god! How long was that? I was working in a restaurant long ago in Spain
but I made like 5 euro per hour.

~~~
voyager2
As I look at [http://www.thedigeratilife.com/blog/federal-minimum-wage-
his...](http://www.thedigeratilife.com/blog/federal-minimum-wage-history/) I
see the minimum wage was actually $1.60 at the time, but I was paid $1.50.
Might have had to do with the fact that I was 15.

~~~
runako
Fun comparisons around a $1.60 minimum wage in 1968:

\- An hour of labor would buy ~4.7 gallons of gasoline. If minimum wage had
kept pace, it would be $12.32.

\- Average home could be bought with ~15k hours of minimum-wage labor (around
8 years). Had minimum wage kept pace, it would be $14.96.

\- Average car price was $2,822. Using this as the sole deflator would put an
equivalent minimum wage at $20.89 today.

\- The average public university tuition + room & board cost $1,143, which
could be earned in 714 hours at minimum wage (this could be physically
accomplished in a summer of hard work). If minimum wage had kept pace with
these fees, it would be $27.28 per hour. (There are not enough clock hours in
a summer break, assuming no sleep, to earn enough at minimum wage to pay for a
year of the average public university.)

------
TheMagicHorsey
I'm surprised that the natural wage in NYC was not that much already ... given
how expensive that place is.

I wonder if employment falls as a result of the wage being raised.

I have family that runs a maid service business in San Jose. The minumum wage
is much lower than $15 and they are already talking about closing up their
business. I assume that if the wage is raised to $15 that the business will
surely close. Which is sad because the maid service business is already the
only source of employment for the women who work there. They aren't choosing
to work there against other options. Its the only flexible hour work they can
get, and they are allowed to keep their kids with them when they work ...
which other employers don't allow.

I'm sure if given the choice between no work and the maid service work, they'd
probably choose the maid service work. But that choice wouldn't be up to them
and the employer.

~~~
ryan93
Entry level jobs in austin now pay 15. Who in NYC would work for less?

------
bhupy
Costs to consumers are up, too. Minimum wage is a way to guarantee a minimum
standard of living to employees, but we collectively pay for it through
increased prices for goods and services, which disproportionately burdens the
poor.

The EITC/UBI is also a way to guarantee a minimum standard of living, and we
collectively pay for that through progressive taxes, the burden for which
disproportionately falls on the rich.

~~~
dangerface
> we collectively pay for it through increased prices for goods and services,
> which disproportionately burdens the poor.

Employees provide services not goods, so the cost of services goes up, but the
cost of goods such as food stays the same.

The rich disproportionately use services over the poor who cant afford to pay
some one else and just do the work themselves.

Example:

The rich go to restaurants while the poor cook at home.

~~~
bhupy
What? The cost of labor is an input into the production of basically all goods
we consume.

You’re right that a lot of employees provide services, but a lot of them work
at factories or stores that produce/sell goods also (retail).

Poor people purchase from this value chain, too.

Markets are remarkably good at minimizing the input required to produce a unit
output. The reason why labor costs have fallen so dramatically is because
markets have minimized the input cost of labor. This is good for ALL
consumers. However at the end of the day, labor’s gotta eat. This is where
welfare comes in.

~~~
dangerface
> The cost of labor is an input into the production of basically all goods we
> consume.

True but most products are not produced in America, the products that are made
in America, are made by robots, the cost of labor on goods in America is just
not significant.

In contrast to services which are all done in America by American people this
is huge.

> This is good for ALL consumers. However at the end of the day, labor’s gotta
> eat. This is where welfare comes in.

You got your classes mixed up the working class are the consumers not the
rich. A rise in wages for workers means consumers have more money to spend
which is good for consumers and business.

~~~
bhupy
> True but most products are not produced in America, the products that are
> made in America, are made by robots, the cost of labor on goods in America
> is just not significant.

> In contrast to services which are all done in America by American people
> this is huge.

This is becoming less true, as we speak. As standards of living in developing
countries increase, the cost of labor also increases, until it more or less
matches minimum wage in developed countries[1][2].

> You got your classes mixed up the working class are the consumers not the
> rich. A rise in wages for workers means consumers have more money to spend
> which is good for consumers and business.

A rise in CASH for workers means consumers have more money to spend. The
disagreement here is in how we deliver that cash to the worker. It's
definitely beneficial for workers to have more money, but forcing businesses
to pay them inflated wages (i.e. greater than their market worth) simply
causes the cost of that business's output to be inflated by a commensurate
amount. You're correct that it gives workers more spending power, but it also
distorts the market downstream by increasing the price of their output for
people that buy the good/service that the worker in question uses their labor
to produce.

In contrast, providing workers with some minimum cash (let's say, whatever the
desired minimum wage is multiplied by 8 hours of work minus their existing
daily wage), will provide workers with the same amount of cash on hand as a
minimum wage, which as you say is "good for consumers and business", while
still keeping the cost of their own output low, and therefore, accessible to
consumers (rich, middle class, and poor).

Today, using minimum wage as a way to ensure workers enjoy a minimum standard
of living just so happens to distort the market that impacts the rich in
America slightly more than the poor, but that's only temporary. In the long
run, it has the same effect of increasing prices across the board. Using
welfare/UBI/EITC (paid for by the rich) in lieu of minimum wage achieves the
same goal, while avoding the market distortion caused by inflated wage prices,
while ensuring that goods/services are cheap for the middle class and the
poor, regardless of the state of the labor market in developing/developed
countries.

[1] [https://tradingeconomics.com/china/wages-in-
manufacturing](https://tradingeconomics.com/china/wages-in-manufacturing)

[2] [https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-
in-c...](https://www.cnbc.com/2017/02/27/chinese-wages-rise-made-in-china-
isnt-so-cheap-anymore.html)

------
diogenescynic
I don’t think high minimum wages really hurt employment as much as
small/family business ownership rates since this just increases the startup
capital and operating cost needed to run a business. So for some cities the
trade off is probably worth it, but this is also why you see the same chains
all over and a lot of unique/niche stores dying out.

~~~
Ensorceled
Amazon, Walmart, and Costco are killing most of those stores, not minimum wage
increases.

~~~
trentnix
Nonsense. Of _course_ increased operational costs for businesses most
sensitive to labor costs has an adverse effect on small business. That such
increases occur at the same time price competition shrinks margin - such as
price competition from the volume sellers you mention - simply exacerbates the
problem.

~~~
Ensorceled
Since real dollar wages are stagnant or declining for decades, with recent
changes in minimum wage laws either barely correcting or not correcting this
disparity, how can this be nonsense? How can decreasing real dollar
operational costs (wages) be an increased cost?

------
someonehere
San Francisco is hurting from this aspect and food delivery partnerships.
Didn’t read the article but they all blame the minimum raise hike, high rent,
and the amount that food delivery services eat out of their bottom line.

Many have stated they regretted working with food delivery businesses and
would have preferred just serving customers in house.

~~~
WhompingWindows
Is SF as a whole hurting, or just restauranteurs? If their businesses are
hurting in a capitalist society, maybe they should look at their practices,
re-evaluate, and survive the competition, or else bust. I don't have too much
sympathy for those entrepeneurs going into a notoriously difficult industry
who then complain that paying lower-class wage workers slightly more is
killing their investment.

------
imtringued
The problem with minimum wages is that displaced workers who can't perform
minimum wage work still need the little money they could get from a less than
minimum wage job. The government would have to offer a job guarantee that is
below minimum wage to cover these people on a case by case basis.

------
RocketSyntax
Do small businesses like mom and pop shops pay minimum wage? Just curious who
the policy actually impacts.

------
ankushnarula
Rebuttal to the New School study: [https://www.minimumwage.com/2019/08/the-
new-schools-bogus-an...](https://www.minimumwage.com/2019/08/the-new-schools-
bogus-analysis-on-nyc-restaurant-growth/)

------
dplgk
Ok, revenue is up because they are charging more for products to cover min
wage. But is profit up?

~~~
trentnix
Of course not. If it was, they'd have led with it. But by arguing revenue is
up, it's almost always burying the lede that profit is not.

~~~
namarie
Is profit the ultimate objective of every human activity? Isn't it enough that
the minimum wage raise has helped employees better their living conditions
even if at maybe a cost in employer profits?

~~~
trentnix
Without profit, someone doesn't get paid. If you don't pay the landlord he can
kick you out. If you don't pay the electric company, you can't keep the lights
on. If you don't pay the gas bill, the gas company can turn off your heater
and your stove. If you don't pay your vendors, you can't by food to cook and
sell. If you don't pay your Internet Service Provider, you can't run credit
cards. If you don't pay the bank you've got a loan with, they can shut your
whole operation down.

Restaurants are notoriously low margin and owner-operator endeavors. So more
often than not, the first person that doesn't get paid is the owner, who sinks
hour after hour into the place to try and keep the doors open. But eventually
the owner has to pay their own mortgage, car payment, etc.

So while profit may not be the ultimate objective of every human activity, it
is _essential_ if you want to stay in business. And if you don't? Your workers
find out the hard way that the real minimum wage is $0.

------
rjplatte
Yeah, NYC is rich as hell. There's simply enough cash to go around, so this
can work. In my small town, this would kill so many small businesses.

------
sornaensis
I don't understand why minimum wage isn't just increased somewhat quickly over
a few years.

e.g. 7.25 -> 8.25 -> 10.25 -> 13.25

Over a few years to allow businesses to adjust their margins gradually.
Increasing the income at the bottom will increase spending, which should be
good for businesses like these that are employing low skill/pay workers.

~~~
thatfrenchguy
That’s what they did in Seattle & San Francisco

~~~
sornaensis
Ah, I did not know that.

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Merrill
>Even a one-time increase of 10% to 15% is unlikely to dissuade large numbers
of customers from dining out. That would amount to an extra $1.20 on a $12
burger.

On the other hand, an extra $1.20 on a $3.50 burger might dissuade large
numbers of customers from dining out. A $12.00 burger is pretty high end in
most parts of the country.

~~~
coldpie
> On the other hand, an extra $1.20 on a $3.50 burger might dissuade large
> numbers of customers from dining out.

That's the whole point of the article. The experiment has been performed and
they are analyzing the results. The results are that people accept a 10%
increase and/or that the buying power of increased wages at the bottom
expanded the market enough to make up for your hypothetical lost income.

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robomartin
Every time I see a discussion about minimum wage I see at least three things:

1- You can immediately tell who has experience running a non-trivial business.
Let's define that as a business that actually makes physical products (not
private labeling something someone else makes) and has, say, more than ten
employees. People who are not exposed to business mathematics say things that
cause any business owner to immediately go for a forehead slap and jaw drop.

2- Nobody ever fires-up Excel to do some math before opening their mouths.

3- The intense effects of an educational system that has indoctrinated people
with the most ridiculous of ideas. These include such things as "corporate
greed" and business owners wanting to build a business on top of people "not
earning a living wage". There's more. Lots of truly ridiculous ideas.

If I haven't lost you, read-on, you might just learn something.

I was going to put together a quick spreadsheet in an attempt to educate those
who might be interested in actually thinking through the problem and, as part
of the process, learning something. However, I fear the effort will have few
takers. It's easier for people to stay with comfortable preconceived notions
than to be exposed to mathematical facts that destroy what they've been told.
Most people are not interested in learning they are wrong.

Instead I found this [0]. It's a decent article which exposes the numbers for
starting and running a basic restaurant. Anyone with non-trivial business
experience has gone through this kind of math many times. After a while you
understand the business equation viscerally and know what such things as
government-forced costs --be it wages, regulatory or other costs-- can do to a
business.

Most businesses do not run with huge lavish profit margins. This is certainly
true of most restaurants. Competition is such that profits tend to find
equilibrium somewhere above zero but certainly not very high above zero, in
most cases likely not double-digits. Which means most businesses operate at a
very delicate balance on the very edge of financial insolvency if they are not
run carefully.

Anyhow, if you care to learn and not say things that truly make absolutely no
sense whatsoever in the context of the reality, versus the fantasy, of running
a business, please read this article, do the math and then do a little more
research.

As an exercise, take this article and increase your labor costs in steps
between 25% and 50%. In this exercise, please explain how you are going to
stay in business, what changes you would implement and how these will affect
your product, ability to compete with others, ability to survive economic
downturns or additional competition (you don't get the entire market to
yourself) and long term viability of your business.

Forced, artificially high minimum wage causes damage to the very people who
actually support politicians who push for these populist measures in order to
get their votes. It's a very destructive force that actually hurts a lot of
people rather than help them. The politicians, ironically, actually benefit
from pushing for these populist ideas because voters will never do the math
and understand they are slitting their own throats. The politician wins
elections and continues to make millions atop a very well protected hill while
truly doing nothing, or worse, causing harm, to the people they are supposed
to help.

Don't believe me? OK, do the same exercise suggested above and DOUBLE labor
costs. If a high minimum wage is so good, well, why not go to $30 per hour
then?

Another important point: Forcing a hike in minimum wage shifts the entire cost
of labor upwards. Why? The person who was making $15 per hour when minimum
wage was $10 will demand a raise when the $10 worker starts making $15. So,
the $15 worker moves up to $20, the $20 to $25 and so on. It's a chain
reaction up the labor cost scale with pernicious effect.

For a deeper dive into restaurant labor costs, read [1]. You'll be surprised
to learn how tight the range of labor costs is for different types of
operations in order for a restaurant to remain viable.

[0] [https://www.7shifts.com/blog/restaurant-
costs/](https://www.7shifts.com/blog/restaurant-costs/)

[1] [https://www.7shifts.com/blog/restaurant-labor-
cost/](https://www.7shifts.com/blog/restaurant-labor-cost/)

------
not_a_cop75
I mean 15 dollars an hour might be enough to live in a sewer in New York. It's
hard to imagine this has a huge affect on anyone.

~~~
swebs
NYC is surprisingly affordable if you're not in Manhattan

[https://www.padmapper.com/apartments/new-york-
ny/l-38104265/...](https://www.padmapper.com/apartments/new-york-
ny/l-38104265/under-1000?box=-74.30015,40.55659,-73.59139,41.03416)

------
trentnix
If raising the minimum wage didn't have an adverse affect on revenue and
employment, then clearly it's time to raise the minimum wage again. Right? Why
not $50/hr? $100/hr?

If increases wages increases revenue, why have all of these restaurant owners
been damaging their business by paying lower wages?

~~~
dicytea
What kind of a joke of a strawman is this? No one is implying that revenue
will infinitely positively increase alongside minimum wage.

------
macspoofing
The only positive argument that is ever made for minimum wage is that
sometimes it does not have a perceivable adverse effect in a strong economy.
There is never an attempt to explain the cases where there is a minor or major
adverse effect.

Even when it doesn't noticeably hurt, a minimum wage doesn't actually make
anything better. It doesn't improve poverty rates. It doesn't improve
employment rates. It doesn't lift anybody out of poverty. It has no
beneficial, measurable side-effect. And there is plenty of economic research
that shows it hurts more than it helps. Just like rent control, it is popular
with progressives because it 'feels' right.

>In fact, some people — including those from the Economic Policy Institute —
have posited that a minimum-wage increase will actually lead to an increase in
employment because of the effects of giving low-wage workers a raise. Other
advantages to restaurants may include lower turnover rates and better job
performance.

Why are we still speculating about this??? We've been studying the impact of
minimum wage laws for decades. This is just hopeful thinking by progressives
activists.

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eigenrick
Assuming that the min. wage increase has been great for NYC, I fear this would
be used as "evidence" that a such a minimum wage would work everywhere in
America. NYC is one of the most expensive places in the US to live and work.

Meanwhile there are entire diners in America that make $30/hr. They do just
fine because they pay $200/mo in rent. A minimum wage of $15/hr would be
silly.

~~~
thrower123
If anything, we need less centralization on this kind of thing, and more
deferral to lower jurisdictions. Trying to pass a national standard in the USA
is going to be inappropriate almost everywhere. If New York City needs a
minimum wage of $20, fine, as long as Jackson, Mississippi can have a $7.50
wage, if that is appropriate there.

------
program_whiz
Wow, so by raising to $15, business is booming (guess it increased sales and
decreased costs). Why stop at $15?! Lets raise to $200 per hour, and then
revenue and employment should be go even higher. Sounds like it doesn't affect
how much the restaurants are charging customers either, so we don't have to
worry about that, we can just rest easy knowing we have lifted people from
poverty without any tradeoffs to society just by changing one number.

------
RickJWagner
For another point of view,

"Roughly 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"

[https://nationalinterest.org/blog/buzz/new-york-
city%E2%80%9...](https://nationalinterest.org/blog/buzz/new-york-
city%E2%80%99s-15-minimum-wage-now-officially-disaster-71761)

~~~
dghughes
That is the biggest problem these days even here in Canada.

A few years ago at my old job I finally got a big raise from $14 to $24/hour.
Then almost immediately reduced to part-time from full-time but the same
duties. I toughed it out hoping for a reversal but one day I was abruptly laid
off without notice. Then three people were hired to do my job.

It seems business have no realistic view of employees. You're merely an "FT"
or "PT" in manager parlance.

Working minimum wage is more difficult than it was years ago due to it being
stuck at a specific rate for decades. But hours worked is just as important
and the trend to cut everyone to part-time was an even bigger disaster.

Even the Fight for Fifteen group has been fighting for $15 for many years.
They should be adjusting the rate for inflation, by now it should probably be
$17.

~~~
aries1980
> Then almost immediately reduced to part-time from full-time but the same
> duties.

This means the same job could have been performed in less amount of time? If
so, why not employers are incentivised to increase the efficiency and raise
the pay at the same time?

~~~
dghughes
No it meant management didn't have a clue. Just a few of my tasks took hours.
Compliance duties where compliance officers picked away at options while I had
to sit there. Escort vendors into the server room often for an entire shift if
not longer. Preventive maintenance on equipment that could take a month. Those
three tasks plus a couple of dozen other duties. Add to that other departments
asking for help.

This place was notorious for reducing employee benefits to nothing. Employee
reviews but the employee is at max pay rate so no bonus but still reviewed. No
holiday parties. Overtime change from over 8 hours to only over 40. And on and
on.

It was just a terribly run organization and I'm glad I'm out of it. There was
a big exodus of long term staff in a short period of time just after I was
laid off.

