New York State passed a $15 an hour minimum wage on April 4, and while progressives celebrate the victory against poverty, employers are already starting to take drastic steps to counter the new labor expenses.
National Review Online reported that the White Castle franchise would need to either raise prices substantially or cut labor in order to compensate for the wage increase.
“Is there any room to raise prices to cover costs?” Jamie Richardson, a vice president at White Castle asked. “We think we’d need to increase menu prices by something like 50 percent. It’s not something we’ve done before. It’d be catastrophic.”
He said that the price increases would destroy many similar restaurants and businesses that often give kids their first chance at a job, especially those from poorer neighborhoods.
“Candidly, this could create a whole generation of kids who won’t get their first job,” he continued. “We’re in tough neighborhoods — and White Castle hasn’t abandoned those neighborhoods. On the surface, higher pay seems noble, but it’s not — because it denies the reality of the free-enterprise framework that has allowed small businesses like ours to thrive.”