Cuomo and Biden Unite: $15 Minimum Wage Proposal for all New Yorkers

By: Wendy Chavez

On September 10, 2015, Governor Cuomo and Vice President Joe Biden announced that New York will increase the minimum wage for fast food workers to $15 an hour by 2018. [1] The move makes New York the first state to raise the minimum wage that high for fast food industry workers.[2] The current statewide minimum wage is at $8.75 an hour, which will increase next year to $9 an hour.[3] As fast-food workers, unions, and their supporters celebrated the victory, New Yorkers left out of this pay increase have expressed their disappointment.[4] In order to require a fast food chain to comply with the new minimum wage requirement, the chain must have at least thirty restaurants nationwide.[5] According to the International Franchise Association (“IFA”), over one hundred fast food franchises will be affected by the new minimum wage requirement.[6] However, some have predicted that over 1.25 million workers who earn low wages and do not work for large fast-food chains will not reap the benefits of the new requirement.[7]

Addressing this problem, and taking advantage of the accrued momentum, Governor Cuomo also announced to the crowd of supporters that he will be introducing legislation next year for a statewide $15 minimum wage, stating that “[r]aising the minimum wage to $15 an hour will add fairness to our economy and bring dignity and respect to 2.2 million people, many of whom have been forced to live in poverty for too long.”[8] Indeed, supporters of raising the minimum wage have presented research, supporting the notion that a $15 minimum wage will allow employees to support their families and afford the cost of living in New York.[9]

The statewide minimum wage proposal has attracted the usual supporters: unions, high-profile Democrats, and the employees themselves who earn less than $15 an hour.[10] As expected, franchise owners, conservative government officials, and some economists predict that a $15 minimum wage will lead to an increase in unemployment rate, job cuts, and a burden on small businesses.[11] The IFA has even formed a coalition in New York with the National Restaurant Association (NRA), and the New York State Restaurant Association, to fight New York State Labor Commissioner Mario J. Musolino’s order increasing the minimum wage to fast food workers, and to combat Governor Cuomo’s statewide minimum wage proposal.[12] The IFA stated that a $15 mandatory wage increase will force small business owners to increase prices for consumers, reduce hours for workers, and it is “an ill-advised policy that significantly interferes with market forces.”[13] While it is easy to find arguments for and against the $15 statewide minimum wage proposal, it is much more difficult to predict the true impact this legislation may have on the New York State economy.

[1] Jeanne Sahadi, New York seals deal on $15 minimum fast food wage, CNN Money (Sept. 11, 2015), http://money.cnn.com/2015/09/10/pf/new-york-minimum-wage.

[2] See News Release, Governor Cuomo, Joined By Vice President Biden, Announces Push to Raise New York’s Minimum Wage to $15 An Hour, Governor’s Press Office (Sept. 10, 2015), https://www.governor.ny.gov/news/governor-cuomo-joined-vice-president-biden-announces-push-raise-new-yorks-minimum-wage-15-hour.

[3] See N.Y. Lab. Law § 652 (McKinney 2913).

[4] Rachel Swarns, Proposed Raise for Fast-Food Employees Divides Low-Wage Workers, N.Y. Times (July 26, 2015), http://www.nytimes.com/2015/07/27/nyregion/proposed-minimum-wage-increase-for-fast-food-employees-divides-low-wage-workers.html.

[5] Sahadi, supra note 1.

[6] Jeanne Sahadi, Franchises Affected by New York’s new $15 minimum wage, CNN Money (July 30, 2015), http://money.cnn.com/2015/07/30/smallbusiness/new-york-minimum-wage-fast-food-franchises/index.html.

[7] Swarns, supra note 4.

[8] See News Release, supra note 2.

[9] Robert Pollin & Jeannette Wicks-Lim, A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs 1, Pol. Econ. Res. Inst. U. of Mass.- Amherst (Jan. 2015),

http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_351-400/WP373.pdf.

[10] See News Release, supra note 2.

[11] Jeanne Sahadi, New York minimum wage increase: Who really pays, CNN Money (July 30, 2015), http://money.cnn.com/2015/07/30/smallbusiness/new-york-minimum-wage-increase/

[12] See Press Release, IFA joins Restaurant Associations To Form Coalition To Save New York Franchises From Discriminatory Wage Hike, Int’l Franchise Ass’n (June 15, 2015), http://www.franchise.org/ifa-joins-restaurant-associations-to-form-coalition-to-save-new-york-franchises-from-discriminatory-wage-hike

[13] Id.

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