New York City businesses struggle after minimum wage increase

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More than six months after the $15 minimum wage went into effect in New York Citybusiness leaders and owners say the increased labor costs have forced them to cut staff, eliminate work shifts and raise prices.

Many business owners said these changes were unintended consequences of the new minimum wage, which took effect at the beginning of the year.

Susannah Koteen, owner of Lido Restaurant in Harlem, said she worries about the impact raising wages could have on her restaurant, where she employs nearly 40 people. She hasn’t had to lay off anyone, but the increase has forced her to cut back on shifts and be more stringent about overtime. She said she changes her menu offerings seasonally and raises prices more often since the wage boost.

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“What it really forces you to do is make sure that nobody works more than 40 hours,” Ms. Koteen said. “You can only cut back so many people before the service starts to suffer.”

Ms. Koteen said she shelved plans to move her restaurant to a larger location. That would require her to hire more staff, and she isn’t willing to take the risk with the unpredictability of her business. “You would just have no choice but to cut people at the bottom,” she said.

In June, the city’s unemployment rate was 4.3%, compared with the state’s unemployment rate of 4%, according to the New York State Department of Labor. Both numbers have remained relatively steady during the past year. – READ MORE

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