The $15 minimum wage that Leftist politicians pushed through in Seattle and New York City has taken a major toll on many businesses, with the Big Apple losing a devastating 1,000 restaurants – while the popular chain Applebee’s had to fire more than 1,000 servers to accommodate the liberal minimum wage hike there.
Restaurant owners, waiters and waitresses are not the only ones hurt by the progressive policy.
“[L]iberals’ minimum wage demands have done severe damage to Seattle's and New York’s businesses,” Townhall reported. “Instead of typical servers, [the CEO of Applebee’s New York franchise, Zane Tankel] explained that they will soon be replaced by concierges, who merely check on customers from time to time to make them feel ‘warm and comfortable.’"
Liberals attack eateries
Tankel maintains that the far Left-leaning Gov. Andrew Cuomo (D-N.Y.) and Democratic New York City Mayor Bill de Blasio have not only wreaked havoc for businesses and their employees – they have detrimentally affected the dining experiences of countless New Yorkers.
"The model now that we're heading towards – where we had one server for three or four tables – we're moving towards one server for 10 tables … eliminating about two-thirds of our labor ultimately,” he explained, according to Townhall. “But it's because of Cuomo, De Blasio – the liberal agenda."
The restauranteur maintained that he was forced to make major changes in order for his business to survive.
“If something becomes prohibitively priced, you find an alternative,” Tankel told Newsbusters.“I've always said increasing minimum wage is technology's best friend. We have 1,000 less servers this time this year than we had this time last year.”
The rationale liberals give for the excessive minimum wage hike is that they are helping low wage earners enter the workforce on a higher rung of the income ladder, but many contend that it is making for more economic hardships than helping out.
“[I]f you don't have a job, $100 an hour doesn't help you a whole lot, does it?” Tankel posed to Newsbusters.
Liberal policy, negative impact
Everyone in the restaurant industry is being negatively affected by liberals forcing their agenda on businesses.
“The Empire State lost 1,000 restaurants last year and the number of jobs as cooks, servers and dishwashers grew by an anemic 1.4 percent,” the New York Post reported. “That’s a far cry from the 4.4 percent annual growth the state’s eateries enjoyed from 2010 to 2015, according to the Employment Policies Institute – a nonprofit research group.
The Big Apple accounts for the lion’s share of the state’s growth – and the slowdowns in the city are more dramatic.”
And the liberal policy has slowed down profits in the fast food industry, as well.
“Employment growth at fast-food restaurants in the city – which are required to pay $12 an hour, or $1 more than other employers – shriveled to 3.4 percent last year, compared with 7 percent growth from 2010 to 2015,” the Post’s Lisa Fickenscher informed. “The spiral has continued into 2017, which has generated just 2 percent growth through May.”
This downward trend is more intense in more formal and sit-down eateries.
“Full-service restaurants in the city are adding even fewer jobs, with growth at just 1.3 percent last year compared to 6.5 percent over the previous five years,” Fickenscher added. “This year it’s down to 1.2 percent through May.”
Employment Policies Institute (EPI) Managing Director Michael Saltsman maintains that even modern-era declines in the economy have not had such a negative impact on the food service industry as new spike in wages.
“This is a drop-off in restaurant growth that didn’t even show up during the great recession,” Saltsman said, according to the Post. “It’s compelling evidence that something big is going on.”
The downward spiral has continued ever since the initial Democrat-pushed wage hike launched last year.
“Some economists point to a rise in pay that began in 2016 when the state began implementing a series of minimum wage increases that will bring the hourly rate to $15 by 2019 for some employers in the city and more gradually in other parts of the state,” Fickenscher noted. “On Dec. 31, 2015, the minimum wage for tipped restaurant employees rose by 50 percent, from $5 an hour to $7.50 an hour. For fast food workers, it rose by as much as 20 percent, from $8.75 to $10.50 – depending on business size and location. And on Dec. 31, the minimum wage for fast food employees rose as high as $12 in New York City, Saltsman notes. Meanwhile, the statewide minimum wage rose to between $9.70 and $11 an hour for non-fast food, non-tipped employees.”
National Restaurant Association Director of State and Local Government Affairs Mike Whatley says that the negative effects the wage hikes are taking on the restaurant industry have only just begun.
“We are beginning to see the harmful effects of drastic minimum wage increases that previous studies have predicted,” Whatley insisted, according to the Post.
Andrew Schnipper – owner of a chain of five burger joints in the Manhattan area – says the wage hike has been insufferable.
“It’s a miserable business at the moment,” the owner of Schnipper’s Quality Kitchen complained, according to the Post. “Most restaurateurs are far less profitable than they were a year ago.”
In locations such as New York, which is renowned across the globe for its quality eateries, the problem of the wage hike is compounded.
“Other experts point to high rents and oversaturation in the foodie capital of the world, where nearly every growing restaurant chain wants to plant a flag and become the next Shake Shack,” Fickenscher pointed out.
One expert on city and state economics, James Parrot – who formerly served with the Fiscal Policy Institute – noted that even though employment at restaurants from coast to coast has been on the decline this year, the plummet in New York is much more severe, yet because the Big Apple continues to be a Mecca for eating out, it still maintained a modest rise.
“It’s unusual for growth like that to be sustained forever,” Parrot explained to the Post. “Restaurant employment [in New York] overall is still increasing and average wages grew about 6 percent in 2016.”
However, the wage hike is expected to continue eating away at the restaurant industry in the months and years to come.
“Schnipper’s, for example, has 10 percent fewer employees than it did a year ago, and many of its current workers have reduced hours,” Fickenscher informed. “The chain raised its menu prices by up to 4 percent last year and is planning another hike this summer, and another one in January – when the minimum wage in the city rises to $13. Meanwhile, sales have slipped this year.”
The many negative factors to boosting the minimum wage – including less attentive service and longer waits – are leaving many restaurant owners and managers wondering what measures they were forced to implement are taking their toll on business.
“It’s hard to know whether customers are scared off by higher prices,” Schnipper told the Post.