NYC restaurant industry jobs evaporate after $15/hr wage sets in

Last December, the final phase of increasing the minimum wage in New York City to $15 per hour went into effect. (Well, at least the last stage for now.) It was considered a huge victory for the Fight for 15 crowd and, presumably, a big win for workers, particularly in the foodservice industry. So how has that been working out since then? As the New York Post reported this weekend, the law of unintended consequences has come roaring into play. They feature the story of one taco and tequila joint on the upper west side that’s been doing a thriving business for a quarter of a century. But now it’s all coming to an end, and they’re far from the only restaurant feeling these effects.

Big Apple restaurants are feeling the heat from minimum-wage hikes, cutting staff hours and even closing kitchens as they struggle to shoulder the extra payroll costs.

Gabriela’s Restaurant and Tequila Bar, a margarita and taco staple on the Upper West Side for the past 25 years, is closing at the end of September — and it has been a long, painful road downhill, according to its mom-and-pop owners.

Since the $15-an-hour minimum wage hit New York City in December, Liz and Nat Milner say, they’ve been forced to slash their full- and part-time staff to 45 people from 60. Quality has suffered, they admit, and customers have noticed: They’re not coming in like they used to, and when they do, they’re spending less.

What happened to Gabriela’s Restaurant and Tequila Bar is a sobering tale for the entire industry. If only somebody had warned the city that this was going to happen.

Okay, that’s a pretty bad joke. Everyone warned them it would happen, but they pushed through anyway to satisfy their liberal voter base. Gabriela’s was a thriving business in an extremely competitive market. They obviously weren’t paying a bunch of people to stand around and do nothing because they needed to keep labor costs down to remain ahead of their competitors. Laying off 25% of their labor force was obviously going to impact their ability to do business and it clearly did.

Now they’re shutting down. And they’re not alone. Another restaurant in Harlem, employing more than 40 primarily minority workers, hasn’t had to close yet but the effects are still being felt. The owner reports that she’s had to cut back everyone’s hours, raise prices and reduce the number of available menu options. All of that adds up to poorer service and fewer customers.

It’s not just the loss of local watering holes and eateries that are the problem. All of the jobs they support are going away too. As of August, the restaurant industry in the Big Apple has shed a shocking 4,000 jobs this year. And as Gabriela’s shows us, the pain isn’t over yet.

So the remaining workers in many of these eateries are, on average, making more per hour than they used to. But many of them are getting fewer hours per week. And thousands of others are making zero in earned wages because they’re on the unemployment lines. Is this really progress for workers? Or is it just a net benefit to the unions who are trying to organize them all?