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No I never said it's all due to higher labor costs, it's in combination with higher rent. And minimum wage start this year, it's a progressive hike over a few years. It jumps to $11 by end of this year as well as paid sick leave. This makes a big difference for small businesses in conjunction with higher rent.
It could be that the higher minimum wages are affecting businesses who are already having increased costs due to high rents.
At the same time something is wrong with your business if you can only afford to pay $7 an hour to employees. You need to close.
It could be that the higher minimum wages are affecting businesses who are already having increased costs due to high rents.
At the same time something is wrong with your business if you can only afford to pay $7 an hour to employees. You need to close.
Absolutely it's a combination. Can't just raise prices and expect the customers to pick up the slack. A lot of small businesses close down, it's not easy for new small businesses to prosper.
Businesses sign long term leases, such as 10 or 20 year leases. So when the lease is UP, the landlords hike the rent dramatically. All this means is that many of the businesses signed their leases at the same time. The other issue is that of competition from the new stores, from Amazon, and changing demographics.
Yes, it must be that many of the leases were signed at similar times, interestingly enough. I've never seen this in the neighborhood before.
As for changing demographics: I don't see the neighborhood demographics changing much at all right now. It's still mostly immigrants.
Absolutely it's a combination. Can't just raise prices and expect the customers to pick up the slack. A lot of small businesses close down, it's not easy for new small businesses to prosper.
Big companies can better negotiate deals with suppliers and distributors. They also have more room to adjust prices.
Probably as costs went up due to rent, and increased labor costs, revenues went down due competition to the new national retailers. There would be multiple factors involved.
I'm talking about from McDonald Avenue to Ocean Avenue
They just demolished a whole block on Kings Highway between 16th and 17th streets for a new development...
Its funny because on Google maps its still looks like a typical Brooklyn shopping street, with that old McDonalnds that used to be there since like the 1970s.
Maybe the landlord is not re-signing their leases so the properties can be redeveloped? I know many of these stores are one-story taxpayers that can be redeveloped into multi-story buildings with apartments/office space up top and retail on the ground floor.
That's what I'm thinking too. It sounds like it has been earmarked. Perhaps for the new affordable housing developments the mayor promised. It seems this area is getting a face lift.
I also saw an article on the porno theater but it was a few years old and a more recent article about a subway line or train scheduled to shut down for 14 months, and also another article about more recent scheduled subway disruptions in the area. Not certain though if that's a reason that is going to affect the area that businesses consider.
11 dollars an hour is nothing, if a business can't afford to pay their employees that much, they're probably not doing so well to begin with
You can do a simple rough calc to see if it's nothing. $9 an hour times 10 hrs a business day add in a bit of payroll taxes is about $260 a day. Assume monthly rent of $4000 and add utilities it becomes about $160 a day. So that's at least $420 a day of fixed costs. Assume that its a crappy mom and pop specialty gift shop that has very high margins and marks things up close to 300%. Even at $9 an hour the first $700 in sales a day is to break even. And this is just $9 an hour at very high margins. Increase pay to $15 the first $950 per day is a throwaway. Now people wonder why there are only Duane Reades and CVS in many neighborhoods. Overall I think $15 an hour is good, but only strong businesses can survive. And that means more tampons and pads around the corner unless you live in an area where rents/average incomes is at a healthy level to support small businesses.
Last edited by bumblebyz; 08-01-2016 at 07:00 AM..
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