The minimum wage has been a contentious issue for years, and with New York now set to raise its minimum wage on Thursday, this is now truer than ever.
New York will be increasing the state’s minimum wage from $8.75 to $9. For fast-food workers, the hourly wage will go up to $10.50 in New York City and $9.75 in the rest of the state as part of a gradual phase-in of a $15 minimum hourly wage at restaurants with at least 30 locations nationwide.
The hourly minimum for tipped workers will go up to $7.50. Previously, the wages for service employees at resort hotels was $4.90, while food service workers received $5 and all other service workers received $5.65.
As this Wall Street Journal article explains, the increase is likely to have a major impact on the service industry, particularly restaurants.
At Pizzetteria Brunetti, a restaurant in Manhattan’s West Village, owner Jason Brunetti said that he will be forced to end overtime and cut employee hours. Delivery workers will also have additional duties, such as chopping wood for the pizza oven.
“They’re not just going to stand there and wait for deliveries, that’s for sure,” said Mr. Brunetti. He expects these changes to raise his payroll $700 a week.
This may just be the beginning of problems that Brunetti will soon have to face. When the next legislative session begins in Albany in January, Gov. Andrew Cuomo is expected to advance a proposal to increase the state minimum wage to $15 an hour. However, it will be an uphill battle for Cuomo to get this bill passed, as many believe the increase would adversely affect the economy.
“It would be a disaster, particularly for upstate New York,” said Ed Cox, chairman of the state Republican Party. “This is all driven by Cuomo’s personal ambitions and politics, not by policy.”
Those in the restaurant industry, particularly in smaller-scale operations, will really feel the affects of this wage increase. “It’s really creating quite a crisis in the fine-dining industry,” said Robert Bookman, counsel to the New York City Hospitality Alliance, an industry group.
The New York State Restaurant Association sent a letter Tuesday to Mr. Cuomo and other government officials seeking a five-year freeze in the minimum wage for tipped workers. “We simply cannot weather a continuous barrage of labor cost increases,” said the letter, which was signed by more than 100 restaurant owners.
The costs of wage increases will likely be passed along to consumers, as restaurants will need to raise food prices or reduce portions to stay profitable. “We’ll probably have to raise our costs of food and have smaller portions of proteins on the menu,” said Robert Pollock, owner of a restaurant in the Hudson Valley. “That’s what most people are doing.”
