'Death by a thousand cuts': Government-mandated wage, benefits hurting small businesses
Business owners say the government-mandated minimum wage of $15 an hour is hurting New York City businesses, including popular eateries with years of history like Gabriela's Restaurant and Tequila Bar.
Gabriela's, which opened 25 years ago according to The New York Post, invited customers to eat and drink for the restaurant's final weekend before closing at the end of September. Owners Liz and Nat Milner told The New York Post that the minimum wage hike basically killed their business.
They're not the only ones making difficult decisions. The New York City Hospitality Alliance surveyed 324 full-service restaurants at the end of 2018 and found that 75% of respondents will cut hours for employees and 47% will cut jobs in 2019 because of the minimum wage hike that went into effect on Dec. 31, 2018. The wage hike affected employees at corporations like McDonald's and small businesses alike.
"It's death by a thousand cuts," the alliance's executive director Andrew Rigie said. "The minimum wage increases put pressure on small businesses. They are well-intended but unsustainable. There's only so many times you can increase the price of a burger and a bowl of pasta."
That's what Gabriela's experienced. The Milners said they had to lay off cleaners, middle managers, their general manager and extra servers.
"I'm not against people making more money," Nat Milner told The New York Post. "These people have worked for me for 20 years. But taxes, groceries, everything is going up and people have a little less money to spend on guacamole and tequila."
Other small business owners are feeling the pinch, too. Wage hikes have led to less hours and education seminars for Philippe Massoud's staff at Lebanese restaurants Ilili and Ilili Box, the CEO and executive chef said.
"I can't even train or educate my staff the way I want to anymore," Massoud told The New York Post.
The Post editorial board cited the plight of Gabriela's owners in an op-ed slamming the $15-an-hour minimum wage hike on Monday night.
"Just as predicted, the $15 minimum wage is killing vulnerable city small businesses, with the low-margin restaurant industry one of the hardest-hit as it also faces a separate mandatory wage hike for tipped staffers," the board wrote.
"All this is fine with the union organizers behind the 'fight for $15' and the elimination of the tipped-wages system: They don't care about any job, or any business, that doesn’t play ball with organized labor. Mom-and-pop shops can go to hell," the board added. "Plainly, Gov. Andrew Cuomo and the Legislature, who are passing the laws the unions want, don’t care much, either."