As the ball dropped to mark the New Year, New York’s minimum wage rose right on cue. On January 1, the hourly minimum climbed to $17 an hour across New York City, Long Island, and Westchester County, while workers in the rest of the state will see the minimum rise to $16 an hour. New data shows New York’s restaurants have already been affected by rising costs including last year’s wage hike, and further hikes could make things worse.
New York’s experience with aggressive wage mandates offers a cautionary tale. Over the past decade, the state has repeatedly raised its minimum wage – including the tipped wage for restaurant servers and bartenders. After years of strong growth prior to 2015, restaurant employment growth ground to a halt around the same time the state adopted annual minimum wage increases.
Things may be getting worse as annual wage hikes and other business costs grow higher.
Latest-available quarterly employment data from the Bureau of Labor Statistics shows New York’s restaurant industry lost more than 10,000 jobs from June 2024 to 2025.
Employment trends reflect a range of economic factors, but the decline coincided with another round of steep minimum wage increases. Last year, New York raised the minimum wage from $16 to $16.50 an hour in downstate counties and New York City, and from $15 to $15.50 an hour upstate.
This is a concerning trend in broader context. Overall employment trends in New York were positive, but restaurants – more directly affected by minimum wage and tip credit changes – saw significant job losses.
It isn’t just workers who are feeling the consequences of New York’s steep wage hikes. Bureau of Labor Statistics data shows restaurants are closing down too.
In early 2025, New York recorded its first year-over-year decline in the number of full-service restaurants since COVID, even as restaurant establishment growth continued to expand nationwide. Across the state, operators have pointed to a growing stack of costs, especially higher wage mandates, that have made it harder to keep restaurants open. One restaurant in Chautauqua County said New York’s costs had them operating “at a loss” for roughly a year, and ultimately decided to close. Fewer establishments mean even fewer jobs, fewer entry-level opportunities, and fewer small businesses anchoring local communities.
Despite this history, pressure for even steeper mandates is accelerating. Earlier this year, state lawmakers introduced legislation to eliminate New York’s tip credit entirely, a move that would raise the minimum wage for tipped restaurant workers from roughly $10 to $11 an hour — depending on region — to the full minimum wage. At the same time, New York City’s newly-elected mayor, Zohran Mamdani, has embraced proposals to push the city’s minimum wage dramatically higher, with some plans calling for a $30 per hour.
As New York rings in another mandated increase, lawmakers should take a look at what restaurants are currently up against – and how minimum wage laws play a role – before making matters worse.