Unexpectedly: New York's Minimum Wage Experiment Has Been a Disaster

The New York Times was super-excited to write on the last day of the year in 2018 over the rise in the state’s minimum wage to $15, which took effect the next day:


Six years after a group of fast-food workers in New York City — earning as little as $7.25 an hour — made the seemingly preposterous demand for a $15 minimum wage, more than one million of their peers will get just that starting this week.

On Monday, the lowest legal wage at most companies that employ more than 10 workers rose by $2, to $15 an hour. Among those whose pay will increase are all fast-food workers as well as more than 25,000 workers at the city’s two airports.


Organizers thought $10 an hour was a reasonable demand, [wage activist Jonathan] Westin said, but workers were unimpressed. Their attitude, he said, was that “$10 is not going to get me anything. We need to go much higher.”

As it turns out – and as many of us predicted when this movement started – “going much higher” meant prices on goods and services would go up, and that some workers would lose their jobs as a reult.

The Foundation for Economic Education reports:

In response to the minimum wage hikes, New York City restaurants did what businesses tend to do when labor costs rise: they increased prices and reduced labor staff and hours.

For example, Lalito’s, a popular restaurant on Bayard Street, recently raised its menu prices 10-15 percent, Eater New York reports.

A New York City Hospitality Alliance survey also showed that three out of four full-service restaurants said they planned to reduce employee hours. Nearly half of those surveyed said they planned to eliminate some job positions in 2019.


Keep in mind that the minimum wage has been slowly going up for years in New York, as AEI economist Mark Perry notes:

[$15] is 15.4% higher than the $13 minimum wage a year earlier, and 36.4% higher than the $11 an hour two years ago. For example, Rosa Mexicana operates four restaurants in Manhattan and estimates the $15 mandated wage will increase their labor costs by $600,000 this year.

A chart from the Bureau of Labor Statistics shows the pain the “Fight for $15” movement has brought to New York’s food establishments and industry workers:

Perry also makes a good point about the lucky restaurant workers who are fortunate enough not to be let go:

Even for workers who keep their jobs, a higher minimum wage per hour doesn’t necessarily translate into higher weekly earnings, if the reduction in hours is greater than the increase in hourly wages. For example, 40 hours per week at $13 an hour generates higher weekly pre-tax earnings ($520) than 33 hours per week at the higher $15 an hour ($495).

Minimum wage laws have also caused a mixture of job losses, decreased hours per week worked, and higher health insurance premiums in progressive areas like Seattle, Oregon, and San Francisco.


In the more unfortunate instances, some stores have closed.

When will liberals finally learn that raising the minimum wage to an excessive amount almost always has a negative ripple effect when it comes to lay offs, less hours for existing employees, increased health insurance costs and, in the worst case scenarios, businesses shutting down? Answer: They won’t.

They’ll just continue to shift the blame for their disastrous policy pushes on “rich” business owners who have the audacity to believe they should be able to make a profit.

Wash, rinse, repeat. It never ends.

Sister Toldjah is a former liberal and a 15+ year veteran of blogging with an emphasis on media bias, social issues, and the culture wars. Read her Red State archives here. Connect with her on Twitter.–


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