Surprise: Fight For $15 In NYC Causes Exactly What Was Predicted

Well, predicted by most people who understand economics, unlike Bill DeBlasio, who’s worried more about social justice

And now, via Legal Insurrection, CBS News reports

The legal minimum wage for New York City employers with 11 or more workers rose more than 15 percent on Dec. 31, 2018, to $15 per hour from $13, giving fast-food, retail and other employees a bump in pay. But some New York City restaurant owners say the latest minimum wage hike is forcing them to cut workers’ hours just to stay afloat.

It’s the third rise in the city’s base wage since Dec. 31, 2016, when it went to $11 an hour. The latest increase is part of a plan that phases in minimum wage hikes across New York state, with amounts and effective dates varying by region and industry. It’s not just a New York phenomenon, however: Minimum wages rose in 20 states with the new year, forcing businesses across the country to grapple with higher payrolls — and compete for workers with giants like Amazon that are already offering $15 an hour.

Jon Bloostein operates six New York City restaurants that employ between 50 and 110 people each. The owner of Heartland Brewery and Houston Hall, Bloostein said the effect of the higher minimum wage on payroll across locations represents “an immense cost” to his business.

“We lost control of our largest controllable expense,” he told CBS MoneyWatch. “So in order to live with that and stay in business, we’re cutting hours.”

Bloostein said he has scaled back on employee hours and no longer uses hosts and hostesses during lunch on light traffic days. Customers instead are greeted with a sign that reads, “Kindly select a table.” He also staggers employees’ start times. “These fewer hours add up to a lot of money in restaurants,” he said.

Bloostein said he has increased menu prices, too.

As Legal Insurrections Mike LaChance notes “This is what happens when professional activists and legislators, many of whom have never owned or operated a business, make decisions for job creators.”

Good job, folks!

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9 Responses to “Surprise: Fight For $15 In NYC Causes Exactly What Was Predicted”

  1. Kye says:

    I guess the head NY comrade thinks small businessmen have access to his money tree. They don’t. But big business guys like him will eventually drive out all the small business then wonder what happened.

  2. Professor hale says:

    $13-15 isn’t that huge of an increase. In NYC, they can probably cover it by raising prices without much disturbance. People there are used to getting gouged for everything.

  3. Professor Hale says:

    If the labor rules get too onerous, there are other options to explore.

    1. Paid by commission.
    2. Paid by product created.
    3. Make all the employees subcontractors, working for labor delivery companies that have fewer than 10 employees each.

    Stupid laws create perverse incentives as well as unintended consequences.

  4. Kye says:

    “$13-15 isn’t that huge of an increase.”

    It sure as hell is a huge increase. It’s almost a 20% rise in your payroll expense. Remember, employer paid taxes go up accordingly also. Most small business owners survive making a net profit of about 10% so that is huge. If you have only five employees per shift that’s an increase of $10 per hour per shift. If a shift runs 8 hours that’s $80x 2 shifts=$160 per day x 7 days is $1120 plus assorted employers taxes at about 12% means about $1,255 total increase in operating costs to the owner. And every cent comes directly out of HIS pay.

    Could you afford a $63,000 pay cut? Especially when small business owners usually make about $80,000 a year.

    That’s the type of law only a left wing nut job who has never run a business nor made a payroll would ever think of. They really hate the little guy. The good people of NY should give DeBlasio the Ceausescu treatment.

    • Mangoldielocks says:

      The left has one card left to play. Illegal immigration.

      they have abandoned the working class, the middle class, the inner cities. Blacks are second class citizens in their voting block. The left only cares abut SJW now and illegal immigrants to keep them in power.

      The insane far, far left progressive loons are now running the party while about 2/3rds of the democrats are still milking their corporate and wall street milk cow.

      It will take everything the lying MSM’s got to keep the independents from destroying the left in 2020 since trumps approval is now 50 percent among Hispanics and nearly 40 percent among blacks.

      The left has nothing but hate and confusion and lies to dish out in the coming 18 months.

    • professor hale says:

      Your math would be true if and only if all of the increase were absorbed by the business owner from the profits. I expect that most competent business owners are already eliminating waste so there is no getting more juice from that orange. I would expect a competent business owner (not all are) to know where his break even point is and stay above that. There is a rational point where prices cannot go up any further without customers abandoning the establishment. i expect in NYC, where prices are already high and people pay them, a 20% increase in labor costs isn’t that significant. But we don’t need to argue this. Let’s just wait for the numbers to come out and see. The one easy prediction is that NYC residents will continue to vote for idiot Democrats no matter what the results are.

      • Ted says:

        My dear professor, you have no idea what you are talking about. Small business owners eliminate waste every day or they wouldn’t survive. They don’t leave cost savings lying around for a rainy day like some bizarre operating savings account. To reiterate, you have absolutely no idea what you are talking about. Generally that’s a clue that it is time to shut your mouth.

  5. Hoss says:

    Trump has hammered unemployment, so the democrats think they need to bring it back up to the equilibrium that produces the maximum amount of people dependent on the government.

  6. Tim says:

    Following the San Francisco and Seattle model since it worked so well there. And will get the same results. Who would of guessed it?

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