6.08.2015

Major Survey of New York State Fast Food Restaurants Suggests Supersized Impact From Statewide Minimum Wage Hike


Business owners say closures, downsizing will occur if Cuomo’s wage board drastically increases the state minimum wage
Washington D.C. -- The Employment Policies Institute (EPI) released the results of a new survey of 924 restaurants located across New York State, asking about their planned responses to a $15 statewide minimum wage for fast food restaurants. Last month, Gov. Cuomo announced a three-person “wage board” to determine what the minimum wage for this industry should be, and the board’s first public hearing occurs tomorrow in Buffalo.
Responses were received from self-identified fast food restaurants across the state, including the greater New York City area, Albany, Buffalo, Rochester, Syracuse, and Binghamton. Most of the respondents have 30 or fewer employees. Over 80 percent of the respondents who reported profit margins estimated them at four percent or lower. 
In response to a $15 fast food minimum wage:
  •        48 percent said they would be “very likely”  to reduce employee hours or reduce staffing levels;
  •        22 percent said they would be “very likely” to close their restaurant;
  •        70 percent said they would be “very likely” to raise prices.
Some of the surveyed businesses noted that they are located near the state border with Pennsylvania, where the minimum wage is $7.25 – over 50 percent lower than the proposed $15 wage mandate.
The report also breaks out the consequences for restaurants in Greater New York City, where 498 of the surveyed restaurants are located. These restaurants similarly respond that they will be forced to increase prices, cut staff, or close in response to a dramatic minimum wage increase.  
View the full report here.
EPI started the website Facesof15.com to chronicle real stories of small business owners forced to adapt to drastic minimum wage increases. In cities such as Oakland, Seattle, and San Francisco, serious consequences have been reported in response to recent wage hikes.
“These survey results predict supersized consequences if the Governor’s wage board chooses to follow Big Labor’s advice and enact a $15 minimum wage,” said Michael Saltsman, research director at the Employment Policies Institute. “If New York wants to enact an opportunity agenda, the state’s politicians can start by avoiding policies that destroy opportunities for the people they’re trying to help.”
 *The survey was conducted  during a four-day period at the end of May. Over 10,000 restaurant business records for New York, identified by SIC code, were purchased. Businesses were screened on whether they identified as a fast food/quick-service business, and whether they would be affected by a $15 minimum wage. Results are not representative of the state as a whole.
For more information, visit EPIOnline.org. To schedule an interview, contact Jordan Bruneau at (202) 463-7650 or bruneau@epionline.org.
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment. EPI receives support from restaurants, foundations, and individuals. Learn more at www.epionline.org.

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