It would seem that New Yorkers are up in arms about the skyrocketing cost of their fast food prices. Although they were well warned ahead of time of the repercussions of granting the wage increase that workers demanded, restaurant and fast food goers are upset none the less.
At the ringing in of 2019, New York’s minimum wage jumped $2 from $13 to $15 an hour, make the struggle for those who are lower-income earning individuals slightly less stressful. However, in order to cover the mandated wage increase, many restaurants, and fast food changes have had to increase their prices. In turn, the ones being hit with the increases—the consumers themselves—are expressing the fact that they are not very happy with the changes.
Restaurant and fast food franchise owners realize that the price increase is upsetting their customers, but they also state that they have to raise prices in order to cover the wage increase. That is not to say they aren’t a little worried that the increase in prices may very hurt their overall bottom line.
According to the president and CEO of the New York State Restaurant Association “Restaurants feel they’re getting to a point where the customer might reject the higher prices, choose a different way to eat out, or eat their own food.”
Adding insult to injury is that even though the NYC restaurants and fast food franchises are indeed implementing changes, such as increases in price, they are still not able to fully make up for the mandated minimum wage increases. Many restaurant owners state that the problem is that the change came too soon and too fast. Owners were not given sufficient time to make adjustments for the increases.
Many experts in the industry simply state that the increase in costs was totally predictable, that no one needed a magic ball to see this coming. If the government decides to drive up the cost of labor, then the only course of action that owners have, being that they operate on a rather slim margin of profit the way it is, is that they will have to make a way to cover the additional costs. In this case, they had to raise their prices—which is a double-edged sword since the raising of prices may, in fact, very well reduce the amount of revenue coming in.
Looking at the whole situation from this angle, the situation appears to be a case of darned if you do, darned if you don’t. Whether the prices are raised to cover the additional payroll demands, and as a result risk losing business, or leave prices the same and try to cover payroll, the owners are in a very tight situation.
So, what’s the verdict—you decide.
Should New York lawmakers have instituted the minimum raise increase in increments, allowing owners to adjust to the new payroll cost?