New York state's recent decision to raise the minimum wage for tipped workers from $5 to $7.50 an hour won't officially go into effect until the end of this year, but restaurant owners are already concerned about how they will cover the cost. Some, like Tom Colicchio, say they will pass the cost on the customer through price hikes. Others worry that the new expenses will force a serious round of shutters. Grub Street reached out to Pok Pok emperor Andy Ricker who breaks it all down saying:
The only recourse is to cut costs or raise revenue....These things affect the quality of experience for customers, and, ultimately, can drive business away. It's a no-win situation for everyone, even the tipped employees who benefit most in the short term. They will most likely have shifts cut, and if the business closes, they are out of jobs.
The move will also hit back of house workers hard, says Ricker, as restaurant owners shift funds to meet the new requirements. As for Pok Pok, Ricker says don't worry about it disappearing. "I do not think an extra $2.50 an hour for front-of-house staffers is going to kill our business (though we are certainly going to have to find creative ways to mitigate it)."