Economic Research and Actual NYC Business Owners Contradict Comptroller's Rose-Colored Conclusions
WASHINGTON -- Today, the Employment Policies Institute criticized as flawed a new paper released by the office of New York City Comptroller Scott Stringer, which claims that a $15 minimum wage would raise the wages of 180,000 food service employees in the city.
The Comptroller's analysis only achieves its results by assuming that all employees affected by a $15 minimum wage will keep their jobs and won't lose hours. This assumption is so unrealistic that not even the economists--Dan Aaronson, Eric French, and Sumit Agarwal--that the Comptroller's paper relies on seem to believe it. Those economists acknowledge "compelling" evidence that a wage hike costs jobs, which is consistent with the vast majority of published economic research.
The Comptroller's prediction of a cost-free $15 wage hike also goes against the results of a recent survey of nearly 500 restaurants in New York City, Long Island, and Westchester County, who were asked about their planned responses to a $15 statewide minimum wage for fast food restaurants.
In response to a $15 fast food minimum wage:
- 53 percent said they would be “very likely” to reduce employee hours or reduce staffing levels;
- 27 percent said they would be “very likely” to close their restaurant
These results are part of a larger survey of 924 self-identified fast food restaurants from across New York State, most of which have 30 or fewer employees. Over 80 percent of the respondents who reported profit margins estimated them at four percent or lower. Statewide, surveyed restaurants similarly anticipated staffing cuts and closures in response to a drastic minimum wage increase.
View the full results here.
“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 should spend less time listening to Scott Stringer and more time talking to the business owners who would be affected by this misguided policy.”
*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.