“Last year, Laura Jankowski raised pay for entry-level employees at her three Tropical Smoothie Café franchise locations on Long Island to comply with New York laws raising minimum pay for fast-food chains. New hires now earn $9.75 an hour—the same wage that the café’s shift leaders had been earning.
“I can’t punish them,” Ms. Jankowski said of the shift leaders. She raised their pay to $10.75 an hour, boosting prices by 30 to 50 cents to cover costs. She now schedules one less person per hour and expects employees to work faster.”