With the recent increase in New York state's minimum wage, and the now Democratic-controlled U.S. House of Representatives quickly passing a federal minimum wage increase, the restaurant industry will be only one of many industries, along with retail and service, that may feel the impact. The increase still awaits approval by the Senate.
With any mandated wage increase, restaurants are asked to pay more to their minimum-wage workers, to their tipped workers, and, sometimes, to kitchen workers such as cooks who may already make more than the minimum.
Minimum wage increases often draw opposition from restaurant operators who say that the cost of covering those increases can negatively affect their bottom line. On the other hand, some economists and legislators argue that bumping up the minimum wage can raise the standard of living for low-wage workers and boost overall spending.
On Jan. 1, the minimum wage in New York rose from $6.75 to $7.15 an hour, the final jump in a process that incrementally raised the minimum over three years. For tipped workers, the minimum wage increased 25 cents to $4.60 an hour, provided that the wage combined with tips is at least equivalent to $7.15.
If passed, new federal legislation will bump the nation's minimum wage up to $7.25 from $5.15 over the next two years.
The question, then, is how do minimum wage increases negatively affect the restaurant industry " one of the nation's largest employers of immigrants and young people.
According to Trudy Renwick, senior economist at the Latham office of the Fiscal Policy Institute, they don't.
"There really doesn't seem to be any evidence that the increase in the minimum wage has hurt the food service industry," said Renwick.
According to Renwick, in the same year as the 2005 minimum wage increase, New York's small businesses experienced 1.6 percent job growth. The food service industry did even better " increasing jobs by 2.7 percent.