According to a poll of close to 1,000 New York fast food business owners, over 20% say that they are “very likely” to go out of business if the minimum wage is hiked from $8.75 to $15 an hour as a result of SEIU’s business harassment campaign. Furthermore, prices are likely to rise and hours will likely be reduced.
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 [Democrat Governor Andrew] 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…
The fast food industry has come under increasing scrutiny from labor regulators thanks to public campaigns by the Service Employees International Union, which spent more than $20 million in 2014 on organizing committees that staged protests in cities across the country. The SEIU is also a major supporter of Cuomo, contributing more than $100,000 to him since 2008…
The EPI also found that the size and nature of franchisees skewed toward the traditional definition of small business. About 85 percent of those surveyed reported having fewer than 50 employees, while more than half said they had fewer than 15 workers. Nearly 60 percent reported that their profits were two percent of all revenue after expenses and labor costs.
New York is not the first area that would see fast food joints hiking prices to compensate for high wage laws. San Francisco Subway franchises were forced to abandon the eatery’s famed $5 Footlong campaign because of expensive labor costs.