After Hiking the Minimum Wage, Mass. and New York Find Mass Job Loss


After hiking their minimum wages, the states of New York and Massachusetts have found that, far from being a net positive, the wage hikes have resulted in job loss and economic chaos.

The states have discovered job loss, store closures, and reduced hours of work for low wage workers, according to Forbes.

The magazine recently noted that the “ugly side” of the Minimum Wage outweigh the good parts.

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“The ugly side is the payroll tsunami they unleash for smaller businesses, already under stress from soaring healthcare costs and rents,” Forbes wrote.

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For some of these businesses, the minimum wage hikes tip the balance between staying in business and going out of business.

That’s what happened to once iconic Boston restaurant Durgin-Park in Faneuil Hall. It closed the doors after two centuries in operation, as it couldn’t cope with wage and healthcare premium hikes.

The wage hike killed these workers’ jobs.

This is a major loss for the city’s historic district, the magazine notes.

But this one, historic restaurant is far from the only place that the Minimum Wage destroyed.

For other small businesses, minimum wage hikes have yet to tip the balance between staying in business or going out of business. But they force them to cut employee hours or lay-off employees to cope with the higher payroll. “First, we have to cut overtime,” says Chris, a franchise owner in Long Island. “Next, we have to lay people off, if we want to stay in business.”

Nowhere is this more evident than NYC, which has seen wage hikes year after year, now paying what the ‘Fight for $15’ movement has fought for around the country.

Starting this year, NYC raised its minimum wage to $15, a 15% increase from the 2018 level, and a 34% hike from 2017.

That was on top of recent hikes in healthcare costs. It was, as Forbes put it, a “payroll tsunami.”

So, what ended up happening after this tsunami rolled over the city?

“Close to three-quarters of restaurants in New York City have cut labor input since the minimum wage was raised to $15 per hour,” the magazine wrote.

That’s according to a survey by The NYC Hospitality Alliance. Specifically, 76.5% of full-service restaurant respondents said they had to cut employee hours and 36% said they cut jobs in 2018 in response to the mandated minimum wage hikes.

That’s consistent with BLS data, which show that New York City full service restaurant employment has gone from an 8% growth back in 2012 to a -2% growth in the last two years.

Pretty much proof that the Minimum Wage is a jobs killer and an economic disaster.

Follow Warner Todd Huston on Twitter @warnerthuston.

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