15 may not be the right number!

Jonathan Miltimore reports in the Foundation for Economic Security,

Data show that following the labor movement’s “Fight for $15” victory, which imposed steep annual increases in mandatory wages for workers, New York City experienced its sharpest decline in restaurant jobs in nearly 20 years.

...Restaurants tend to operate on famously low profit margins, typically 2 to 6 percent. So a 40 percent mandatory wage increase over a two-year period is not trivial.

In response to the minimum wage hikes, New York City restaurants did what businesses tend to do when labor costs rise: they increased prices and reduced labor staff and hours.

...A New York City Hospitality Alliance survey also showed that three out of four full-service restaurants said they planned to reduce employee hours. Nearly half of those surveyed said they planned to eliminate some job positions in 2019.

Read more here.

Raise minimum wage to $15 per hour, and get robots to replace humans

Clyde Hughes reports at Newsmax,

Robots have replaced 60,000 Chinese workers at the Apple and Samsung supplier Foxconn, which has recently cut its workforce by more than half.

...Ed Rensi, who was chief executive officer of McDonald's USA in the 1990s, made headlines recently when he told Fox Business that robots would be cheaper than hiring humans at $15 an hour. He made the comments in connection with recent campaigns to increase the minimum wage.

"I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry – it's cheaper to buy a $35,000 robotic arm than it is to hire an employee who's inefficient making $15 an hour bagging French fries," Rensi said. "It's nonsense and it's very destructive and it's inflationary and it's going to cause a job loss across this country like you're not going to believe."

Read more here.

A boon to workers?

Mark Antonio Wright reports for National Review on the minimum wage hikes recently enacted in New York and California. He interviewed Jamie Richardson, vice president at White Castle, the burger chain I have heard so many good things about, but have never had the pleasure of eating there.

...Richardson says — and common sense dictates — that if menu prices at fast-food chains shoot up by anywhere near 50 percent, many people will stop eating out as much, replacing trips to White Castle with trips to the grocery store. Customers can always vote with their feet and their dollars. But thinking through the implications of raising prices to cover increased costs, which could reduce sales, isn’t what irks Richardson the most: To him and to White Castle, New York’s minimum-wage hike is a threat to a culture of opportunity in the neighborhoods that they have always called home.

“Candidly, this could create a whole generation of kids who won’t get their first job,” Richardson laments. “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.”

White Castle is very proud of providing what for many of its workers is the first rung on the ladder of employment. And it loves to promote from within. Richardson tells me that of White Castle’s 450 top employees in restaurant operations, “444 of them started out behind the counter in an hourly job.” Susan Milazzo, the regional director in charge of the 35 Castles in the greater New York City area, is a prime example of a worker who started out on the bottom rung and worked her way up.

But some of White Castle’s successes are even more exceptional: Richardson tells me the story of Jahangir Kabir, a Bangladeshi immigrant who came to America without knowing a word of English. He got a job as a cook at a White Castle and learned the vernacular by interacting with customers. In four years, he was a general manager. On the way to being promoted to district supervisor in charge of eight Castles, Kabir went to school, earning an MBA from St. Joseph’s College in Brooklyn in 2005. Recently he completed a Ph.D. in business administration — and it all started at White Castle, cooking fries.

Read more here.

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