EDITORIAL: NYC offers another cautionary tale on minimum wage hikes

Gov. Steve Sisolak envisions a large increase for Nevada’s minimum wage. But the job losses that come from sudden minimum wage hikes aren’t figments of economists imaginations. Just ask restaurant employees in New York.

At the end of 2018, the minimum wage in New York City for most employers rose to $15 an hour. In 2017, it was $11 an hour and eventually went to $13. That’s a 36 percent increase in just two years.

That money had to come from somewhere — and much of it came from the same employees it was supposed to help. That’s clear from a survey of 324 restaurants conducted by the NYC Hospitality Alliance.

More than 76 percent of those restaurants lowered employee hours in 2018. Another 36 percent cut jobs last year because of the higher wage floor. With wage requirements going even higher this year, 75 percent said they planned to cut employee hours and 47 percent said they would eliminate jobs.

Almost every responding restaurant said it increased prices. Many of the restaurants found regular customers came in less frequently after the price hikes. Three percent said the minimum wage hikes “were a significant factor” in the closing of a restaurant.

Lido Restaurant in Harlem is one of the restaurants that’s cutting jobs. Susannah Koteen, the owner, said she’s eliminating bussers — an entry-level job — and having servers clear their own tables. It’s not something she wants to do, especially because she knows what even an entry-level job can do for someone’s career.

“Our current general manager started as a busser the day we opened,” Ms. Koteen told CBS News. “English is not his first language, he has his GED. He is smart, hardworking and cares about customer service.”

He never would have had the chance to advance his career had the $15-an-hour minimum wage been law when he started.

What’s happening in New York City and in places such as Seattle should offer a warning to Gov. Sisolak and other Nevada pols eager to gain political points by raising the minimum wage. The heart-wrenching image of the struggling mother trying to support a family on the minimum wage is a progressive unicorn. The vast majority of those earning the minimum are young adults or teenagers trying to acquire the skills necessary to advance themselves. Pricing them out of a job through misguided interventions doesn’t do anybody any good.

In a perfect world, supply and demand would determine wages. For instance, the state’s robust job market has been a boon to many unskilled workers who now have more choices and opportunity. With many fast-food establishments in Las Vegas advertising pay rates of more than $10 an hour, there’s little need for additional government shackles on state businesses, particularly when the state constitution already calls for automatic increases in the minimum wage.

But liberal politicians have an innate urge to meddle. Gov. Sisolak announced last week that he wants at least a $12-an-hour minimum wage. That would be a boost of almost 50 percent and a certain job killer. So much for his previous promise to work with employers and small-business owners on the issue.

Mimicking New York or Seattle is hardly a promising recipe for bolstering Nevada’s reputation as an attractive location for entrepreneurs and other job creators.