New York Restaurants Struggle to Adapt to Higher Wages

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New York Restaurants Struggle to Adapt to Higher Wages

The mandatory wage increase, to $15 from $13 per hour, went into effect Dec. 31 for all employers in the city with 11 or more employees. (Photo by SPENCER PLATT/GETTY IMAGES)

 

MORE THAN three-quarters of restaurants in New York City have reduced employee hours since the minimum wage was increased to $15 per hour.

In a survey by The NYC Hospitality Alliance, 76.5 percent of full-service restaurant respondents said they had to reduce employee hours and 36 percent said they eliminated jobs in 2018 in response to the mandated wage increase.

Additionally, 75 percent of limited-service restaurant respondents said they plan to reduce employee hours and 53 percent said they plan to eliminate jobs this year.

Championed by progressive Democrats, minimum wage hikes have been a hot-button political issue across the country – especially in the restaurant industry, where ensuring a fair wage to workers who receive tips has proved challenging.

The mandatory wage increase, to $15 from $13 per hour, went into effect Dec. 31 for all employers in the city with 11 or more employees. It marked an increase of about 15 percent and was the city’s third wage hike since Dec. 31, 2016.

In response to the increase, 90 percent of full-service restaurants reported that in 2018 they increased menu prices. Almost 3 percent eliminated tipping or cited the increase as “a significant factor” in closing their business. Furthermore, almost 56 percent of full-service restaurants made changes to their food and drink offerings to reduce costs.

In 2019, restaurants are looking to make even more changes. About 87 percent reported they would increase their prices and about three-quarters said they would eliminate jobs. Almost 4 percent said they would eliminate tipping.

Compared to 2017, 40 percent of restaurants reported last year that they employed fewer people but their payroll costs did not change.

Among limited-service restaurants, the mandated wage increases were a significant factor in 15.6 percent of closures in 2018. In 2019, 78 percent will increase their menu prices and more than half will eliminate jobs. Of limited-service restaurants that increased their menu prices, about 47 percent reported that repeat customers dined there less frequently.

Businesses with 10 employers or fewer are also affected by the wage hikes. As of Dec. 31, those wages rose from $12 to $13.50 and are scheduled to match the $15 per hour minimum at the end of 2019.

 

Source: U.S.News

By | 2019-01-30T12:37:06+00:00 January 30th, 2019|English|