“The calculation is quickly done. For a group like ours, that’s $ 450,000 more expenses per year ”. Laurent Vasseur accuses the blow. The French boss of bakeries Financier Pâtisserie is one of the many New York entrepreneurs who had to increase their employees paid at minimum wage on December 31, 2018.
New York State Governor Andrew Cuomo adopted a plan to gradually increase the “hourly minimum wage” in New York City in April 2016. It saw a first increase from $ 9 to $ 11 as of December 31. 2016, then rose to $ 13 on December 31, 2017 until reaching $ 15 at the end of 2018 for companies with more than 10 employees. Companies with less than 10 employees have suffered an increase from $ 12 to $ 13.5 as of December 31, 2018 and still have one year to offer their employees $ 15 / h. Finally, employees paid on a “tip” basis saw their wages drop from $ 8.70 / hr to $ 10 / hr as of December 31, 2018.
“Ça penalizes all companies, considers Laurent Vasseur. We had tried not to increase our prices for a year and a half despite the first salary increases, but today we will have to absorb these costs ”. An opinion shared by Sébastien Muller, director of operations District, New York’s large French market. “We are not going to increase our prices this year but we had done it in 2017 to anticipate these increases in the minimum wage. It is difficult for us to bear because we import a lot of quality French products which are already highly taxed ”.
“We have a small structure, with neighborhood customers that we want to retain. We have no other choice but to continue to grow to absorb this increase“, Underlines for his part Clément, a restaurateur who does not wish to be identified. He is the head of a French restaurant with 13 employees.
If the three French entrepreneurs agree that the increase in this hourly wage is good news for employees, they deplore a snowball effect on the price of raw materials. “Milk and butter are increasing because our suppliers find themselves in the same situation as us and have to review their prices”, explains Laurent Vasseur. Clément found in his restaurant “A 10% increase in raw materials over the past year”. He adds that “Garbage collection took almost 20%”, while in the District, the cleaning company has also revised its rates upwards.
These increases in salaries and operating expenses in New York are added soaring rents, which are pushing some traders to go out of business. This is the case of the restaurant Petite Abeille of the Belgian Yves Jadot which closed in October 2018 after 15 years of activity. “Çit made no sense to continue ”, he told the site Eater on January 11, after learning that her rent would drop from $ 18,000 to $ 30,000 per year.
For Clément, “many restaurants will continue to close. Those who want to survive will have to shorten their opening hours by eliminating, for example, the lunch service“. Laurent Vasseur is considering this type of restructuring. “We have already reduced overtime as much as possible, but our employees rightly complain about working less and not necessarily making more money at the end of the month. We could also reduce our opening hours, and offer more self-service kiosks that would replace cashier positions ”.
In the District, Sébastien Muller wants to focus on training. “Raising the minimum wage forces us to be creative, leveraging our human capital to increase productivity”. The French entrepreneur assures like Clément that his company will not lay off, “even if it means redirecting current elements to other missions“. At Financier Pâtisserie, Laurent Vasseur “Hope to be able to keep everyone, but we will have to make choices”.
The French let himself “two to three months to assess all the impacts of this increase in the minimum wage ”. An increase that concerns one million workers in New York, and more than 17 million Americans with increases implemented in 19 states and 21 US cities.
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