AP
BY:
New York Gov. Andrew Cuomo’s (D.) promised minimum wage hikes for fast food New York Gov. Andrew Cuomo’s (D.) promised minimum wage hikes for fast food restaurants could shut down one out of every five chain restaurants in the state, according to a new survey.
The Employment Policies Institute, a free market think tank and critic of minimum wage hikes, surveyed nearly 1,000 self-described fast food entrepreneurs about how they would respond to statewide, industry-specific wage hikes. More than 20 percent of respondents said they were “very likely” to go out of business if the state raises the minimum wage for fast food joints to $15, a 70 percent increase from the current $8.75 statewide minimum wage.
Such a hike could spur higher costs for customers and reduced employment opportunities and hours for workers. Business owners responded overwhelmingly that such policies would hurt the very workers that Cuomo and activists claim to want to help.
Only 5 percent of respondents said they were “unlikely” to raise prices to cope with a $15 wage; 70 percent said they were very likely. In order to retain customers and remain competitive, a majority of the owners said they would be forced to cut employee hours or curb hiring.
“Low single-digit profit margins, which are typical for the fast food industry, explain why business owners in the state report considering a series of off-setting measures to adapt to a $15 minimum wage,” the report says.
Cuomo is seeking to increase wages on the fast food industry through a three-member board that is debating a potential $15 wage at chain restaurants. EPI analyst and report author Michael Saltsman attended Friday’s hearing, criticizing both Cuomo’s methods and also the policy.
“Our survey shows that a dramatic minimum wage hike would have the same negative effect in New York that it’s having on the west coast. Employers and employees should hope the wage board can tune out the noise and take a careful look at the consequences,” Saltsman said. “An unelected board hearing where proponents shout down the other side—is this what democracy looks like?”
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