BUSINESS
07/22/2015 03:20 pm ET Updated Jul 22, 2015

New York State Calls For $15 Minimum Wage For Fast Food Workers

The mandate would nearly double the wages of many fast-food workers.
A panel convened by New York Gov. Andrew Cuomo (D) recommended the state set a minimum wage of $15 for fast-food workers.
Credit: Bryan Thomas/Getty Images
A panel convened by New York Gov. Andrew Cuomo (D) recommended the state set a minimum wage of $15 for fast-food workers.

A panel convened by New York Gov. Andrew Cuomo (D) recommended Wednesday that the state set a minimum wage of $15 expressly for New York's fast-food workers, a novel regulatory maneuver that would impact many of the lowest earners in the state.

The proposal approved by the state wage board would raise the minimum wage for fast-food workers in New York City from its current level of $8.75 to $15 by 2018. For fast-food workers in the rest of the state, the minimum wage would rise to $15 by 2021. The wage mandate would only apply to workers at fast-food chains that have at least 30 locations around the country.

If the plan isn't blocked in court by the fast-food industry, it stands to be one the biggest policy victories to date of the union-backed Fight for $15 movement, which is advocating for a $15 minimum wage and unionization of the fast-food sector. The passage of the plan led to raucous applause by labor activists and other supporters present at Wednesday's hearing.

"We did it," Jorel Ware, a member of Fight for $15 and a McDonald's worker from the Bronx, said at a press conference after the hearing. "The Fight for $15 has shown me what's possible when workers stick together."
 
Of the wage board, Ware added, "I want to thank them for understanding what it's like to live in poverty."
 
Under pressure from progressives, Cuomo ordered the state's labor commissioner to convene the wage board earlier this year and asked its members to determine an appropriate statewide wage for the fast-food industry. In an op-ed in The New York Times, Cuomo said that the process was meant to reduce income inequality by "lifting up the bottom."
 
The board's three members included Mike Fishman, secretary-treasurer of the Service Employees International Union, as a representative of labor; Kevin Ryan, founder of the online shopping site Gilt, as a representative of business; and Byron Brown, mayor of Buffalo, as a representative of the general public. The three unanimously approved the $15 measure in a vote on Wednesday, sending it to the labor commissioner for approval.
 
"This is not just good for the workers in the room," Fishman said after the recommendation passed. "It's good for the economy and the state and America."
 
Activists cheer after Wednesday's announcement.
Credit: Mary Altaffer/Associated Press
Activists cheer after Wednesday's announcement.
Advocates of the increase claim Cuomo has strong legal footing for such a move. Under state law, the governor has the power to issue so-called wage orders, mandating certain minimum wages according to industry or geographic area. Historically, such orders have been used to boost wages for youth workers and apprentices, as well as tipped restaurant employees.
 
If the legal authority seems clear, the politics are even clearer. Over the past three years, the Fight for $15, which is funded by the SEIU, has successfully agitated for large increases to state and local minimum wages around the country. Many of those raises have been traced directly to the periodic strikes carried out by fast food workers, starting with those in 2012 in New York City, where workers said they earned far too little to support themselves and their families.
 
Although a federal minimum wage increase in Congress has gone nowhere, the Fight for $15 -- and, in particular, the site of fast-food workers and their allies filling city streets in protest -- has compelled political leaders like Cuomo to take action on income inequality.
 
"It's difficult to find a reason [for the policy], other than personal animus on the part of the union, and the governor shoring up his left flank," said Michael Saltsman, research director at the conservative Employment Policies Institute, an industry-backed group that argues against minimum wage increases.
 
Saltsman said if such a recommendation went into effect it would be "precedent setting" as a mandate targeted at a large industry in a single state. He argued that grocers and restaurants not subject to the rule would be at an advantage.
 
"It's going to have this weird competitive dynamic within the state," he said. "You're magnifying the potential for unintended consequences."
 
But even if the wage increase is restricted to fast food, it would compel employers in other low-wage industries to raise pay as they compete for a quality workforce, said Tsedeye Gebreselassie, staff attorney at the National Employment Law Project, an advocacy group that supports the wage board's proposal. She compared it to having high union density to prop up wages.
 
"Once wages get raised in fast food… that puts pressure on janitorial employers to raise wages, too," she said. "It's good competition, to raise wages to attract and retain a workforce."
 
The announcement by the wage board Wednesday followed news that progressive lawmakers in Congress, led by Sen. Bernie Sanders (I-Vt.), a candidate for the Democratic presidential nomination, proposed a bill to raise the federal minimum wage to $15. The minimum wage is currently $7.25 per hour and hasn't been raised since 2009. Republicans, however, control both chambers and have so far stymied any minimum wage proposals from moving forward, including one that would hike the wage to $10.10.
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