Over the past decade, New York has been a testing ground for some of the country’s most aggressive wage policies. Governors and lawmakers have repeatedly floated sky-high minimum wage hike proposals that push the state far beyond national norms, and even the rate of state inflation. Former Governor Andrew Cuomo set the stage with a rapid series of wage hikes that reached $15 statewide by 2024, and other politicians have kept upping the ante ever since. For instance, earlier this year, NYC mayoral candidate Zohran Mamdani called for the city’s minimum wage to rise to $30 an hour by 2030 – a level that would be unprecedented anywhere in the country. From there, another union-backed coalition has formed to push for a $30 minimum wage statewide with full elimination of the state’s tip credit.
These proposals build on years of minimum wage hikes and tip credit reductions that have driven hourly rates from $7.25 in 2012 to $16.50 today in New York City, Long Island, and Westchester County, and $15.50 in the rest of the state.
Steep wage hikes have well-documented consequences, and New York is already showing signs of trouble. Bureau of Labor Statistics data shows the state recently saw its first post-COVID decline in restaurant employment, but that’s not the only red flag. Growth in the number of full-service restaurants is also faltering, especially when compared to national trends.
Over a decade ago, New York’s restaurant establishments grew faster than the national rate. Yet following steep wage hikes, growth in the number of restaurants became more volatile, and even began to decline, while nationally the number of full-service restaurants was growing even through 2019. New York was hit substantially harder than the nation in terms of restaurant declines during the pandemic, likely caused by the state’s stringent shutdown requirements. Yet coming out of a few years of recovery from COVID, the latest BLS data shows that New York is once again facing a declining trend. In the first quarter of 2025, New York experienced its first year-over-year loss in the number of full-service restaurants (a 2% decline) since COVID, even as the national sector has continued to expand.
New York’s full-service restaurant sector tells a cautionary tale. While the rest of the country has steadily expanded over the past decade, New York’s aggressive wage policies have introduced uncertainty and ultimately reversed growth in the restaurant industry, which employs a majority of minimum wage and tipped employees affected by wage and hour law changes. Lawmakers and other advocates continue to push for unprecedented hikes, but the data shows that these policies come with real economic consequences. If policymakers want to support, and not shrink, New York’s restaurant industry, they should look carefully at the national trends they’re leaving behind.