Candidates, lawmakers, and activists alike are pushing New York to raise its minimum wage – but the Empire State’s history of wage hikes has slashed employment over the last decade.
Lawmakers should learn the state’s history before proposing laws that would repeat the same consequences for businesses and their employees.
Earlier this year, state legislators introduced a bill to eliminate New York’s tip credit, which would raise the minimum wage for tipped restaurant workers from $10 per hour upstate ($10.65 in Long Island and Westchester County, $11 in New York City) to up to $17 per hour. Now, mayoral candidate Andrew Cuomo is proposing raising New York City’s minimum wage to $20 per hour, up from the current rate of $16.50 per hour for most employees and $11 per hour for tipped restaurant employees.
New York has a history of slashing restaurant employment through its existing minimum wage law.
Statewide, New York has implemented year after year of wage hikes and reductions to the tip credit. Beginning in 2014, New York began raising its minimum wage from $7.25 per hour up to $15 per hour in NYC, $12 per hour in Long Island and Westchester County, and $11.10 in the rest of the state in 2019 – with separate, higher rates for quick-service, fast food restaurant employees. These hikes continued through COVID to the present, where wages are $16 in NYC, Long Island, and Westchester County, and $15 in the rest of the state. These increases were also paired with simultaneous increases in the tipped minimum wage for full-service restaurant employees.
Prior to these increases in 2014, New York’s restaurant industry employment was growing more than 5% annually. Following the implementation of new wage hikes beginning in 2014, year-over-year restaurant employment growth declined every year, even dropping negative in 2018 and 2019 – indicating New York’s restaurant industry lost jobs in the later years of higher wage hikes. These losses occurred even prior to the effects of COVID.
The pain hasn’t stopped there. The latest data shows that following the recovery period from losses sustained during COVID, statewide restaurant employment has dropped again in 2024, the first negative drop since COVID recovery began.
The impacts of these wage hikes were also felt in New York City itself, which saw annual employment growth plummet in quick-service restaurants – from 6.4% annually before the wage hikes went into effect down to less than 3% in 2018 and 2019, prior to the impacts of COVID.
If mayoral candidate Cuomo gets his latest campaign wish, this could be the beginning of even more devastation for New York City’s restaurants. Just look at what is currently happening on the West Coast.
Last year, California instituted a $20 minimum wage just targeting the fast food industry, and the law has so far cost over 16,000 jobs.
Even for those workers who didn’t lose their jobs outright, Census Bureau data on workers’ schedules shows affected restaurant workers lost up to 7 weeks of work after the $20 minimum wage law went into effect.
Affected fast food restaurants saw prices spike by 14.5%.
Survey data shows a majority of affected restaurants are less likely to expand in state, are looking to move out of the state, and three-quarters said the law has increased the likelihood of shutting down.
The past consequences in New York and current devastation in California are not shocking – the overwhelming majority of economists over the last three decades conclude minimum wage hikes cause employment loss.
New York City has already suffered under wage hikes, and California serves as a warning sign for pushing these hikes even higher. Candidates looking to become the next mayor should study up, or subject the city’s restaurants and employees to additional harm.