Small Businesses Struggle With $15 Minimum Wage Hike in NY: ‘They’re Shutting Down’

Some small businesses in New York City are struggling to meet the demands that come with the city raising the minimum wage to $15 an hour.

According to a report published Monday by the Wall Street Journal, many business leaders and owners in the Big Apple have said that they are having to cut hours, raise prices, and reduce staff in their businesses due to the rising labor costs that they say come from the recent city law bumping up the minimum wage.

The owner of Lido Restaurant in the Harlem borough of the city, Susannah Koteen, has nearly 40 people working for her restaurant and is worried what the rising minimum wage could do to her business.

While she has not had to reduce her staff, she has had to be more careful about overtime and pull back on some people’s shifts.

“What it really forces you to do is make sure that nobody works more than 40 hours,” Koteen said. “You can only cut back so many people before the service starts to suffer.”

Sarah McNally — who owns the local bookstore chain McNally Jackson Books, which employs 75 people at its four locations in New York City — said that there is “absolutely no benefit” to operating a retail business in the city, and is working to open two more stores to stay profitable.

She has not had to reduce hours or employment to deal with the pay increase, though.

“With raising minimum wage to living wage, it feels now like we’re at the bottom of the pay spectrum,” McNally said. “There’s absolutely no benefit to being a retail business in New York.”

The president of the Queens Chamber of Commerce, Thomas Grech, told the Wall Street Journal that he has seen an increased number of small businesses closing in the last six to nine months. He believes the rising closures are due to the minimum wage legislation.

“They’re cutting their staff. They’re cutting their hours. They’re shutting down,” Grech said. “It’s not just the rent.”

Spokesman for Restaurant Opportunities Centers United Anthony Advincula said that business owners should not place the blame on the rising minimum wage if there are struggling as there are other factors that contribute to a business not succeeding. He also said that the pay increase was a “race, gender, pay-equality issue,” and not just a “business issue.”

The Restaurant Opportunities Centers United had backed the wage increase.

“Increasing to $15 would reduce income inequality, and the number of individuals living in poverty now is ridiculously high,” he said. “This is not just a business issue; this is a race, gender, pay-equality issue.”

A number of Democrats — including freshman firebrand Reps. Alexandria Ocasio-Cortez (D-N.Y) and Rashida Tlaib (D-Mich.), as well as Democratic 2020 hopeful Elizabeth Warren (D-Mass.) — support the idea of raising the national minimum wage to $15 an hour.

New York City business owners are not the only ones worried about wage hikes.

As IJR Red previously reported, business owners in Emeryville, California — which saw a minimum wage increase to $16.30 an hour — are concerned about the effects the increase has on their businesses.

Local business owner Erik Hansen warned that “there is a tipping point” with the wage increase, with his being having to choose between raising sandwich prices and firing employees.

“We may have the highest minimum wage, but I don’t think the people in Emeryville will feel like paying the highest prices in the country,” said Hansen.

Published in IJR Red

Responses

  1. No, Patti. If the business owners had no restrictions, they would pay their employees next to nothing. Oh, wait, I am confused. They are doing that now!

  2. Shouldn’t the wages be up to the owners of the business and not the government!!!!

  3. Who didn’t see this coming? It seems that Democrats can’t see past their collective noses. They should be forced to take a course in business education. Many in Congress are attorneys. Not to reply on the obvious pun….I rest my case.

  4. Losing your job pays exactly $0/hr, less unemployment, food stamps, etc. If the Dims were smarter (they’re not) they’d understand that this means more unemployed, less job growth. Look at how the high tax-rate and regulations strangled the economy under Obozo.

    It would give them too much credit to say this is a way to undermine Trump, since the $15/hr movement started in 2012 under Obozo. How come no one asks why HE didn’t promote it? Oh right, he was too busy groveling, abasing the US, and apologizing to other countries. Also, coordinating a midnight money airlift to Iran took some doing.

  5. People who have never operated a restaurant do not understand how slim the profit margins are. I’m looking at every single one of those demanding $15/hr, including the politicians who fail to pay their own employees the same (unless embarrassed into doing it like Bernie).

    Let’s also look at the “one size fits all” of $15/hr, which might mean something in lower-cost-of- living areas. NYC is NOT one of these, nor Seattle, nor anywhere in CA.

    So….persons ignorant of the actual business or even running a business are going to mandate wages like the completely arbitrary $15/hr. The results of this idiot’s policy are out there. Look at Seattle or SF. Businesses will close, declare bankruptcy, or cut worker hours or jobs.

    Nice going morons. If they were smarter (they are definitely not) I’d say they were trying to undermine Trump’s job #s. That would require a depth of thinking they lack. Note as well that the movement for $15/hr started in 2012, during Obozo’s hapless WH occupancy. WHY DIDN’T HE SAY SOMETHING if it was so damned important?

  6. Wait till they see a rise in unemployment as minimum wage forces the human out in favor of the AI.
    ‘Oh, but we can retrain these people.’
    Really? They don’t have the drive to better train themselves for a better paying job already and unemployment/welfare is much easier anyway. So what makes you really think you can retrain those who don’t want to be trained in the first place.

    Minimum wage shouldn’t be a lifetime achievement.

    It’s a shame that New Yorker’s couldn’t see what happened in Seattle and Tacoma when they raised minimum wage and drove most of the mom and pop stores and shops out of business.

    I thought the Left wanted to employ more people and hated the large retail and fast food companies. Apparently they are not as smart as they profess themselves to be.

    1. Dave, they’ve stumbled on a “backdoor” way to discredit Trump by depressing employment #s and inflating unemployment #s.

  7. Among the many things Democrats don’t understand is that the vast majority of people work in small companies and to make those mom & pop companies pay out more than they take in will result in people losing their jobs – full-time becomes part-time or gone altogether along with any benefits. It is called the law of unintended consequences

  8. It’s obvious the Dimwit Party doesn’t have the intelligence to read statistics. According to a recent University of California at Irvine study, for every 10% increase in the minimum wage, low skill unemployment increases by 8%. In short, the $15/hr minimum wage will result in 1.3 million jobs LOST.

    That’s how the REGRESSIVE Dimwits roll.

  9. This will happen all over America, especially with small businesses.

  10. I was under the impression from the title of the article that it was addressing the trickledown effect of raising the minimum wage but instead the article talks about inequality in another area. People forget that most minimum wage jobs are not high skill jobs but low skill jobs, which are starting jobs not career jobs, most of the time.
    But because of the wages of these jobs have risen doesn’t mean that everyone else has gotten increases in wages for their skilled jobs. The only thing in the last decades that has equaled this rise in the minimum wage has been the rising cost of necessities ( housing, utilities, food, transportation, etc). The only people not effected by this rise of the minimum wages are those who profit from the employment of low wage employees. The former middle class income from $40,000– to $80,000 has joined the lower income level in loss of affordable wages for expenses, especially in those individuals who have a skilled job. Go figure !

  11. Businesses are evil. Capitalism is evil. You don’t believe me? Ask a socialist. Money grows on trees after all.

    1. Did you know that the Democratic Socialists of America at their recent conference voted (how democratic) to oppose capitalism and the nuclear family?

      When they weren’t busy objecting to smells, gendering, background chatter, etc.

  12. ignorant D-RATs lack the capacity to figure this out
    very pathetic
    and stupid New Yorkers keep electing these D-RAT Neanderthals
    ya get what ya vote for-DA’s

  13. Here we go again, Social Justice. Everybody is happy to get the increased pay but don’t realize that their very jobs may be in jeopardy. Workers and Social Justice warriors fail to consider the effect on the owners of businesses. Increased Social Security payments to match the increased amount taken from the employee’s new pay in addition to the increased pay to the worker. So a raise of a few dollars is much more expensive to the employer than just the pay raise and if the employer has 30 or 40 employees the increased costs can be significant. The federal and state governments, along with Democrats seeking reelection, should stop meddling in the free business market. If a person is unhappy with a low wage then find a new job that pays more. The federal and state governments are famous for screwing things up and a mandated minimum wage does exactly that. Also, a mandated minimum, livable wage at fast food restaurants will generate career adults taking these jobs that are/were training grounds for teens to learn punctuality, teamwork and a work ethic are disappearing. Employers don’t want to pay $15 per hour to a trainee.

    1. The workers always think the owners ar3 well off and don’t share the profit enough..we used to have a business and one of the employees tried to tell us what he wanted for profit shRing one year….needless to say, he was gone asap

    2. And if places like restaurants have had to raise their prices because of minimum wage then it is time to stop leaving a tip.

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