Some NYC Small Businesses Sound Alarm, Say New Legislation Helping Workers Is Crushing Bottom Line
NEW YORK (CBSNewYork) -- Changes in labor standards, including hikes in the minimum wage, are supposed to help low-wage workers.
But some local businesses say they're crippling their bottom line, CBS2's Kiran Dhillon reported Tuesday.
For 30 years, Gabriela's has been a staple on the Upper West Side, but rising costs and slowing demand will force the Mexican eatery to close in October.
"We'll never make it through the winter and hope for the spring to change things. That's what we did that last year and spring never came," owner Nat Milner said.
Milner said recent minimum wage hikes in the city are to blame, the latest requiring $15 an hour for employers with more than 11 workers. For Milner and others, it was too much.
"We had to costs anywhere we could. We lost whole levels of middle management. We had to reduce the quality by moving people in the kitchen," Milner said.
But it wasn't just the minimum wage that hurt Gabriela's. Milner said the paid safe and sick leave law also had an impact, and now legislation is being considered to require workers get personal time off.
MORE: De Blasio Proposes 10 Days Of Paid Personal Time For NYC Workers
The proposed bill would require businesses with five or more employees to allow workers to accrue two weeks paid leave, which they could then use for vacation or personal obligations. The city is hoping for a vote on the legislation by the end of the year.
The bill would also apply to domestic in-home workers. Employees at Gabriela's are happy about these efforts. But most say more needs to be done to help small businesses, so workers don't end up without a job.
"We need jobs also, so if all the business fall down because of that it would be a disaster for us, too," employee David Nkusi said.
MORE: NYC Giving Out "Love Your Local" Grants To Help Small Businesses
The New York City Hospitality Alliance agrees and thinks more incentives are needed for small businesses to survive, such as tax cuts and reduced payroll taxes.
"We know places are closing, so if we love them and we want to support them, then our government officials need to take action," the Alliance's Andrew Rigie said.
The Alliance adds any additional changes to labor standards must be implemented slowly so businesses can adjust. However, some economists say workers can't afford to wait.
"Do low-wage workers, can they actually withstand such a gradual adjustment in wages?" said Ben Zipperer of the Economic Policy Institute.
The Institute adds providing workers with a living wage contributes to a healthy economy because they buy things.
Back at Gabriela's, owner Milner said he's all for workers getting a fair shake, but said he'll look at a more profitable business model with his future restaurants.
When asked if that model will consist of fewer workers, Miler said, "Fewer workers. Yeah, counter service."
A new model that's too late to adopt here.
