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Minimum wage growth triggers salary tsunami, & # 39; As small businesses cut back

Small business owners across the country are beginning to feel the squeeze as several states are moving towards a minimum wage of $ 15.

While proposals to raise wages are meant to help workers, more moms and pop coffee shops as well as restaurants respond to cutting time, eliminates jobs or closes completely because they cannot keep up with rising wages according to the law.


It is the ugly side to highly speculated wage increases, economists say, adding that the bumps can release a "wage disaster" for smaller businesses already stretched thin by rising rents and debilitating health costs.

"For some of these companies, the minimum wages on the balance between staying in business and leaving the business," wrote Panos Mourdoukoutas, economics professor at the LIU Post in New York, in Forbes.

Boston's iconic restaurant Durgin-Park in Faneuil Hall was forced to close its doors in January after nearly two centuries in business, the owners said they could not keep up with wage and health premiums.

"We had thought of [closing] for the past year, "Michael Weinstein, CEO of Ark Restaurants, who bought Durgin Park in 2007, told" First of all, our landlords are terrific. It is a cost problem that we have encountered. We [own] several places across the country facing a minimum wage increase. As part of this, we are faced with an increase in responsibility, property and health insurance. "


Having won her races last year, New York Rep. Alexandria Ocasio Cortez, DN.Y, "swung" to say goodbye to the Union Square coffee shop where she used to work.

She tweeted: "The restaurant I used to work on closes its doors. I swung today to say hello once, and kids around with friends like old times. "

What she didn't say is that the popular coffee shop closed their doors because it couldn't afford the lowest $ 15 pay rate as Ocasio-Cortez has gone to support.

"Times have changed in our industry," said co-worker Charles Milite to The New York Post. "Rental rates are very high and now the minimum wages are up and we have a large number employees. "

The US Action Forum estimates that the minimum wages will kill 261,000 jobs – with most losses concentrated in New York and California.

Over the past three months last year, 4000 workers lost full-service restaurants, the Bureau of Labor Statistics data show At the end of last year, there were fewer restaurant workers in New York than in November 2016, according to Investors Business Daily.

Last month, Maryland became the sixth state in the country to approve a grave ie minimum wage growth to $ 15 and hour. The US Action Forum estimates that the move could cost the state 94,600 jobs.

"For perspective, this is equivalent to eliminating nearly 50 percent of expected job growth between 2016 and 2026," Ben Gitis, director of labor market policy at the American Action Forum, wrote. "Maryland is not in a strong position to absorb this shock, as it continued to experience below average job growth while the state implemented its previous minimum wage growth from 2014 to 2018."

CLICK HERE FOR FOX NEWS APP [19659004] But the followers argue that the hikes are needed to solve the revenue revenue and also keep up with inflation. The question has been widely spoken by democratic candidates on the presidential campaign track, with several backing a bill to raise the salary to $ 15 an hour at federal level.

Sen. Bernie Sanders, I-Vt., A sponsor, has called the current minimum wage a "hunger wage".

California, Illinois, Massachusetts, New Jersey and New York have all approved a minimum wage of $ 15, which has the District of Columbia. Phoenix employees are on their way to hourly rates on May 1st. In total, there are 20 states that have or will move towards a $ 15 salary.

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