Manhattan is already largely unaffordable for service sector workers, so most of them currently live in the outer boroughs. You pull rent stabilization and that too becomes unaffordable so they move to jersey? It's not that they can't afford to commute from jersey but most people who are working those gigs do so because they want to live in NYC. If they have to move to jersey they'll say f**k it and just move to a different region and live in a cheaper city. Just my guess of how it would go down.
This doesn't mean we wake up the next day and there are no waiters. There will still be job seekers but they're not making a livable wage anymore. I guess it's not the end of the world but you have to realize two things about NYC. One is that we have a lot of great night life because talented people can actually make a career out of working at nice restaurants. Two, so much of our artistic and cultural draw in this city is supported by those people working service gigs on the side to pay the bills. Long term there are bigger implications for working class people being priced out of all the boroughs but the immediate implication I see is that the city becomes a lame place to live.