Pizza Is Doomed If New York Passes A $15 Minimum Wage

Connor D. Wolf

Manhattan Institute Senior Fellow Edmund J. McMahon warned Monday that a $15 minimum wage could kill pizza restaurants in New York state.

McMahon spoke at a panel discussion hosted by the Center for New York City Affairs. He argued the minimum wage debate is too focused on large corporations. While big companies are much more likely to absorb the higher wages, small businesses will struggle, which include a hallmark institution in New York state: pizzerias.

“Let me point out, most of the people employed in New York are employed by small firms,” McMahon said. “If this policy goes through, in five years the only place in upstate New York where you’ll be able to buy pizza is Domino’s, unless its Pizza Hut, because they have the marketing might, the capital to absorb it.”

At the moment the state minimum wage is $8.75 an hour. Democratic Gov. Andrew Cuomo proposed Sept. 10 a plan to raise the minimum wage to $15 an hour. If passed by state lawmakers, the proposal would gradually bring the minimum wage to $15 in New York City by 2018 and statewide by 2021.

“You’re actually going to favor the big, the global, the national, the people with massive marketing budgets,” McMahon continued. “These things always have an effect one way or another and you’ll actually give rise to and promote the development of an economy that is even more dominated by the big, the global, the people that have muscle and big marketing budgets at the expense of the small, the local the community based.”

The panel included labor and economic experts on both sides of the issue. Like the national debate, the panel looked at whether increasing the minimum wage will help low-wage individuals. Those like McMahon argue an increased minimum wage won’t because it will likely cause less job opportunities because of the increased cost of labor.

Supporters, however, claim a $15 minimum wage will help the poor by allowing them to more easily afford basic necessities. The increased spending could then have the added benefit of stimulating the economy. They also say there isn’t sufficient evidence to conclude job loss or business closures will occur at all or on a significant scale. Nevertheless, even the nonpartisan Congressional Budget Office (CBO) agrees any increase of theminimum wage will likely result in at least some job loss.

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