New York State passed a $15 an hour minimum wage on April 4, and while progressives celebrate the victory against poverty, employers are already starting to take drastic steps to counter the new labor expenses.
National Review Online reported that the White Castle franchise would need to either raise prices substantially or cut labor in order to compensate for the wage increase.
“Is there any room to raise prices to cover costs?” Jamie Richardson, a vice president at White Castle asked. “We think we’d need to increase menu prices by something like 50 percent. It’s not something we’ve done before. It’d be catastrophic.”
He said that the price increases would destroy many similar restaurants and businesses that often give kids their first chance at a job, especially those from poorer neighborhoods.
“Candidly, this could create a whole generation of kids who won’t get their first job,” he continued. “We’re in tough neighborhoods — and White Castle hasn’t abandoned those neighborhoods. On the surface, higher pay seems noble, but it’s not — because it denies the reality of the free-enterprise framework that has allowed small businesses like ours to thrive.”
How would this exodus help create Cuomo’s vision of “economic justice”?
“These policies will not only lift up the current generation of low-wage workers and their families, but ensure fairness for future generations and enable them to climb the ladder of opportunity,” Cuomo said during his legislation signing.
This policy is so misguided, Richardson was like Yoda in his explanation of another path to creating prosperity.
“This is something that’s become a bumper sticker,” Richardson explained. “But it hasn’t really been thought through. There is a better way to get people out of poverty than hiking the minimum wage.”
Democrats don’t think in those terms, they want simple policies that can be sold to voters regardless of the long-term consequences.