Susannah Koteen, the owner of Lido in Harlem, said her restaurant is busy but…

"I think people see a full restaurant and the assumption is that they're making money,” she said.

Koteen said the increase in the state's minimum wage to $15 dollars an hour in the city, from $13 is hurting her cash flow.

"I've definitely taken a large pay cut,” she added. “I've also cut back hours wherever I can in order to stay a viable business."

Those cuts eliminated five busser shifts, about 40 hours of work every week.

According to the New York City Hospitality Alliance, a restaurant trade group, other restaurants are feeling the pinch, too.

The group surveyed nearly 500 restaurants and 74 percent said they plan to reduce employee hours; 36 per cent say they've already let people go.

"Regardless of how well intended these laws and regulations are they have a financial impact and that impact is resulting in restaurants cutting back on workers jobs, reducing jobs and in many cases shuttering their business,” said alliance director Andrew Rigie.

The Coffee Shop on Union Square, featured in the Devil Wears Prada and HBO’s Sex and the City, closed in October after 28 years.

It's owner Charles Milite puts some of the blame on the higher minimum wage.

“Even though the restaurant was hugely successful, $10 million dollars a year in revenue, we could not survive anymore with rising rent and the increase in payroll,” he said.

Georgette Farkas, the owner of Rotisserie Georgette on East 60th Street said the wage hike forced her to hike prices.

Side dishes are now $13 dollars each, up from $11 dollars.

"Whenever you have increased costs you've go to see where you can cut something else without ever compromising service,” she said.

Unions and advocacy groups that pushed for the higher minimum wage acknowledge it's caused some restaurants to struggle, but that the overall effect of the increase is positive. 

A study by progressive groups said restaurant hiring increased after the first phase of the wage hike took effect.

"We will see costs going up as food costs and other costs have gone up but we also will see people being able to spend more and eat out more and that will help the industry,” said Saru Jayaraman, President of Restaurant Opportunities Center United.

"It's the responsibility of the employer to care for their workers,” restaurant worker Serena Thomas added.

There's a new push to raise the wages of all tipped employees again, but this proposal not only faces opposition from restaurants, some workers oppose it, too.