NYC Businesses Are Feeling the Burn After the $15 Wage Hike and No One Saw It Coming

Who could have predicted this? Who could have seen hiking the minimum wage to $15/hr hurting businesses, employees, and customers?

Except for 74 percent of economists, major retail chains who exhibited the same results, and other cities that had suffered as a result of minimum wage hikes, who could have thought this was going to happen?

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According to the Wall Street Journal, businesses in New York City are now another example of how raising the minimum wage hurts the economy and the community with businesses left and right shutting down or laying people off. What’s more, it’s the small businesses that are being hit hardest:

More than six months after the $15 minimum wage went into effect in New York City, business leaders and owners say the increased labor costs have forced them to cut staff, eliminate work shifts and raise prices.

Many business owners said these changes were unintended consequences of the new minimum wage, which took effect at the beginning of the year.

The Queens Chamber of Commerce has noted an uptick of rough waters for small businesses as well:

Thomas Grech, president of the Queens Chamber of Commerce, said he has seen an uptick in small-business closures during the past six to nine months, and he attributed it to the minimum-wage legislation.

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

Lisa Sorin, president of the Bronx Chamber of Commerce, said Manhattan businesses and their customers can afford to pay more to compensate for the wage increase, while those in the surrounding boroughs probably couldn’t. “It’s almost like a whirlwind of keep up or get out,” Ms. Sorin said.

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New York has been feeling the sting of the wage hike for months now. When I first reported the financial problems being experienced by businesses back in April, 76.5 percent of full-service restaurants had already cut back hours with 36 percent already having laid employees off.

The Wall Street Journal reported that officials claimed that unemployment within the city has remained relatively the same, but that it’s likely only going to get worse for businesses as the pressure increases.

Bottom line. Hiking the minimum wage doesn’t look good on paper or in practice, and should be avoided.

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