New York gave its burger-flippers a meaty raise on Wednesday, as the state’s fast-food wage board recommended that the minimum wage for the industry’s workers be raised to $15 an hour. That recommendation will become law if approved by New York’s labor commissioner Mario Musolino, who is expected to back the measure.
Under the wage board’s proposal, the new wage will be phased in incrementally, reaching $15 an hour by January of 2018 in New York City, and July of 2021 for the rest of the state. The requirement would apply to all fast-food chains with 30 or more locations nationwide.
“Two and a half years ago, $15 was considered a crazy dream,” New York Working Families Party Director Bill Lipton told msnbc in a written statement. “Now it’s close to becoming reality for over 180,000 working families.”
Currently, New York’s minimum wage is set at $8.75 an hour, up from $7.25 two years ago. The board’s proposal won’t change that rate for all those working minimum wage jobs that don’t involve fast-food. Raising the wage for all of the state’s workers would require securing the approval of New York’s Republican-led Senate, a feat Democratic Gov. Andrew Cuomo failed to achieve earlier this year.
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But in New York, the governor has the power to empanel industry-specific wage boards that can recommend minimum wage increases, which then become law with the approval of the state’s labor commissioner.
While the wage increase will be restricted to a single category of businesses, it could still have broad effects on the state’s economy and low-wage workers — according to Cuomo, a majority of New York’s minimum wage workers are employed by fast-food companies.
Two out of every five fast-food workers in New York state live in or near poverty, and 60% rely on some form of public benefits to survive, according to the Fiscal Policy Institute. The institute’s chief economist, James Parrot, argues that those benefits amount to a $900 million taxpayer “subsidy to fast-food’s low wage business model.” In Parrott’s analysis, the industry is profitable enough to afford paying its workers a living wage, as the increased labor cost will be partially defrayed by savings from reduced turnover.
But theoretical savings on turnover give little comfort to some fast-food executives, who argue the new wage will put an unsustainable burden on franchisee owners.
“We have more than a dozen franchisee-owned locations on Long Island that will be affected by a hike in the state’s minimum wage,” Mike Rotondo, CEO of Tropical Smoothie Cafe told msnbc. “Franchisees are being unfairly singled out because they are part of a franchise business model. In reality, they are independent, small business owners who serve their local communities and create dozens of jobs like any other entrepreneur in the state.”
The wage board’s vote comes nearly three years since fast-food workers began organizing mass protests to demand higher pay.
In the post-recession U.S. economy, the number of workers trying to support families through service work has increased significantly. While 60% of the jobs lost in the recession were in mid-wage occupations paying between $13.83 and $21.13 per hour, 58% of the jobs created in the wake of the recession have been in occupations that pay below $13.83 an hour, according to the National Employment Law Project. Despite the popular conception of fast-food workers as young or part-time laborers, the Center for Economic and Policy Research found that more than a quarter of the industry’s workers were raising children in 2013.
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Earlier this year, Seattle and Los Angeles both passed legislation to raise their cities’ minimum wages to $15 an hour through a series of incremental increases.
Democratic presidential candidates Bernie Sanders and Martin O’Malley have come out in favor of raising the federal minimum wage to $15, while the party’s 2016 front-runner, Hillary Clinton, supports raising the wage but has yet to officially endorse the $15 figure.
Eric Levitz