NYC Restaurants May Axe Workers Because Of Wage Hikes: Survey

NEW YORK — The restaurant industry isn't swallowing minimum wage hikes easily. About half of New York City eateries plan to axe workers this year in response to state-mandated pay increases, a survey released Thursday shows.

Most restaurants also plan to raise menu prices and cut employee hours because of the required wage and salary hikes, the New York City Hospitality Alliance's survey of full- and limited-service eateries found.

The minimum wage in New York City jumped on Dec. 31 to $10 for tipped food-service workers and $15 for other workers businesses with at least 11 employees. That and other mandates handed down in quick succession in recent years are putting pressure on restaurateurs, said Andrew Rigie, the hospitality alliance's executive director.

"Restaurants are constantly closing, there's tons of vacant storefronts in neighborhoods throughout the city, and it is extremely difficult to run a small business," Rigie said. "So businesses — they're trying to find ways to adjust their business model to this new reality."

The hospitality alliance, a trade group with more than 2,000 members, surveyed restaurants about rising labor costs between Nov. 28 and Dec. 27. Operators of 574 establishments responded, including 324 full-service restaurants and 250 limited-service eateries.

Some 47.1 percent of full-service restaurants said they would eliminate jobs in 2019 in response to the mandated pay hikes, while 87.3 percent said they would raise menu prices and 74.5 percent planned to cut worker hours.

Less than 4 percent said they would eliminate tipping, a strategy some restaurants have attempted but ultimately abandoned.

The responses were similar among limited-service restaurants: 53.1 percent said they would eliminate jobs this year, 75 percent said they would cut hours and 78.1 percent planed to hike menu prices.

The survey's findings were released a day after Mayor Bill de Blasio announced a proposal to require every New York City business with at least five employees to give workers two weeks of paid personal time off.

De Blasio, a Democrat, has argued the first-in-the nation measure, which requires City Council approval, would help struggling workers rest and spend time with their families. More than 500,000 employees in the city currently lack paid time off, the mayor's office has said.

But Rigie said he's gotten dozens of calls from people concerned about the proposal, which he said "smacks up against the financial reality of small businesses." It could prove to be yet another burden for the city's restaurant industry, which employs more than a quarter-million people, he said.

"They need time to breathe and figure all this stuff out," Rigie said. "We’re in New York City — most of the restaurant owners I speak with are socially very progressive. But they have the pressure of making payroll every week, of paying their rent every month, on top of all the other pressures."

De Blasio's proposal, though, won praise from Restaurant Opportunities Centers United, a New York-based organization that works to improve conditions and wages for restaurant workers.

"This is an extraordinary step forward, especially because 35 percent of restaurant workers are parents who have already had to skip too many of their children's plays, recitals and games because of lack of paid time off," the group's executive director, Sekou Siby, said in a statement.

(Lead image: A view of wine served at Dinner With Jean-Georges Vongerichten Part Of The Bank Of America Dinner Series Presented By The Wall Street Journal at Perry Street Restaurant on Oct. 11, 2018 in New York City. Photo by Robin Marchant/Getty Images for NYCWFF)