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If restaurants have two shifts, 8 hours each and have 10 employees each shift that $320 a day. If they are going out of business over the extra $2 an hour they now have to pay their employees then bye....They should've been paying their employees $15 an hour long ago. I have no time for cheap owners to skimp on the "little people" who most of the time work the first jobs.
Spoken like an ignorant fool.
Much like the politicians who enacted this new min wage law.
The delivery truck guys handling the food are probably raising prices to makeup for a new minimum wage. Same for whatever packaging guys handled that food on it's way into a nearby warehouse.
But if these owners were already running on such thin margins then it was inevitable they would be forced to reduce staff or close.
Quote:
Originally Posted by pierrepont7731
Uh hello... Anyone that has a staff of over 11 is subject to the new minimum wage hike. A co-worker of mine was complaining about how a place she goes to on the Upper East Side (Yorkville) raised their coffee prices. I told yeah because of the new minimum wage. She goes OHHH that's right!!!
You think food prices aren't going to be impacted by this?? On what planet?? As someone who runs a department and has to budget costs I get the big picture. Either places are cutting back on staff, raising food prices or both, but something is being cut and something is being increased to make up for these extra costs. The only saving grace for some of these places is they may not be negotiating new leases or their space may not be that large to begin with. For example, when I go to Birch (coffee shop), I haven't noticed a difference in the number of people working there, but they definitely cut back to one person when they can.
Running a restaurant always has had thin margins. Same as with supermarkets. It may only seem like $2 extra dollars, but it goes much deeper than that.
Arent Delivery truck drivers unionized? If so they get more than minimum, and great benefits.
But at some point the how food service industry will simply have to readjust their cash flow/expense models in order to stay in business. What else will these owners do in the future? Start a bank? I guess all the commercial space will just have to sit empty for a few years. No, everyone including the landlord to vendor, to owners will have to readjust. Of course it will start at the top.
Quote:
Originally Posted by pierrepont7731
Yup... Water and other costs keep going up. Owners pass that on to the tenants. Taxes going up... All passed on...
At some point it will cap itself. If the neighborhood your building in is not in an upcoming hood, you cant raise rents more than section 8 is paying, or RS is allowing. But most landlords dont want the section 8. And doing enough renovation to break out of RS will not be worth it if hood is not upcoming.
That is same with any business.
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Originally Posted by Kefir King
So the drama is to blame the bottom-rung people working in restaurants for their lack if of profitability instead of putting the onus where it belongs, on gouging commercial landlords.
Put rent stabilization type guidelines on all properties being rented as meal providers/restaurants.
Does anyone think that the dishwasher's wage increase is more onerous a burden on a restaurateur's bottom line than the RENT?
Hopefully this will have a ripple effect going up all the way to the top. Whoever that may be the banks, speculators or landlords.
The rents are ballooning because the cost of owning commercial property keeps going up. The base rent will always be cost+%, especially when we are talking about smaller owners and not giant development corps who may be able to afford to lease out a space at a loss for X number of years. This is especially evident in Manhattan below 96th Street, where commercial tenants have to pay 3.9% CRT tax on top of everything else.
Their needs to be a cap on all the speculation. The banks cannot just keep printing out money and throwing it out there when there is no way to pay it back other than printing out more money for the next sap (buyer). Thats just a ponzi scheme. We have not changed anything since the GFC.
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Originally Posted by caribny
No shock as at some point buying dishwashing equipment makes sense. Labor is the easiest cost to cut. The minimum wage has almost doubled over the past several years, and yet poverty rates have barely budged, so clearly some aren't working as many hours that they once did.
A minimum wage is just that. A minimum wage. Fully grown adults aren't supposed to be earning this so one needs to think why so many are trapped in these dead end jobs.
Most restaurants do have a machine, but you need someone to load it. Or maybe than can go with recycled paper plates, and recycled plastic utensils, and just throw it all in recycling, no need to clean.
Quote:
Originally Posted by caribny
Small landlords being put out of business and global investment funds taking over. They have to maximize returns to the investors......or else.
Maybe folks need to learn that its often the smaller business people who get hurt more than the global tycoons.
The giant corps, global institutional investors are already on their way to taking things over. The minimum wage hike will affect them. They also employ many many more people than small businesses.
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Originally Posted by vision33r
The problem with food industry is that many nights a restaurant owner has to eat wages and took in a lot less. It's mainly weekends and holidays they rack up the profits. That's why some places close on Mondays because not enough tables to make up for the cost of wages. It's also a very price sensitive business. Some days supplies cost much higher due to weather or supply issues. I remember when the price of milk and eggs went up a lot of restaurant owners complain about it since it's difficult to increase cost to consumers easily. Margins are very razor thin.
Yet restaurants have been around forever. Through wars, disasters, minimum wage hikes etc etc they have continued on. I sure there will still be plenty of spots left after this MW hike as well.
The rents are ballooning because the cost of owning commercial property keeps going up. The base rent will always be cost+%, especially when we are talking about smaller owners and not giant development corps who may be able to afford to lease out a space at a loss for X number of years. This is especially evident in Manhattan below 96th Street, where commercial tenants have to pay 3.9% CRT tax on top of everything else.
Here is how NYC government works:
Step 1 - Put in a tax on commercial tenants in Manhattan designed to discourage business rentals.
Step 2 - Tenants who can't afford the expense leave Manhattan, leaving most storefronts as Duane Reades, Starbucks, and Chase banks or vacant.
Step 3 - Cry that the tax works as intended and complain about vacant storefronts.
Step 4 - Tax vacant storefronts!!! (lmao)
Another example:
Step 1 - Subsidize NYCHA parking lots in Manhattan
Step 2 - Cry that there is too much traffic.
Step 3 - Institute congestion pricing on cars.
Step 4 - Subsidize parking lots in Manhattan with the money from congestion pricing tolls!!!
Bull**** in some cases. It wasn’t the tax that put a friend out of business, but the massive leap in rent the landlord asked of a thriving business. This wasn’t a single digit rent increase after timely rent payment which doesn’t precede the tax—this was a double and a half increase in rent and with no viable tenant afterwards. You’re going to tell me the commercial rent tax was somehow going to justify that kind of increase?
You very well know the CTR isn’t the deciding factor, or if you don’t then I don’t know how you landed on that. I’m not in favor of the CTR, but this is a weird interpretation of the magnitude of its effect. Do you know where CTR is applied? Are you aware of the many businesses outside of its zone that also have a bevy of empty commercial spaces?
This isn’t a one of a kind scenario. There have been plenty of publicized examples of what the rent increases are. The problem I’m having to understand is when landlords do this without a viable tenant to take over especially when there are other empty spaces in the area. What is that then? Is it larger companies that are investment vehicles to buy property and can wait things out in the hope they can get recoup their potentially overleveraged investments? Is it a EB-5 vehicle perhaps?
There can be reasonable commercial vacancy tax that takes into consideration what a market rate versus potential operational costs to landlords, and the city needs it.
Last edited by OyCrumbler; 02-22-2019 at 11:54 PM..
I LOVE the kiosks that have been installed in the fast food places. Best thing ever.
Me, too.
And the Bronx Target has so many more self serves and so few cashiers relative to the Ct Target I live near.
Owners will work hard to offset the affect of the higher minimum wage, by having fewer staff, work fewer hours, with automation doing more of the work.
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