New York set to raise minimum wage to $15 for fast food workers

Yesterday, a panel appointed by New York Governor Andrew Cuomo gave the #FightFor15 movement a huge victory when it endorsed raising the state’s minimum wage to $15 for fast food workers. The raise would take place over the course of a few years, rising faster in New York to take into account its higher cost of living.

The proposal now moves to the state’s labor board, where it is widely expected to be approved, raising the minimum wage for the state’s 180,000 fast food workers. The minimum wage for those workers currently stands at $8.75, slated to rise to $9 at the end of the year.

While the $15 minimum wage has been passed in major cities, including Los Angeles, Seattle and San Francisco, New York would be the first state to adopt a form of the proposal, which applies to any restaurant with more than 30 locations in the state.

However, there are reasons to doubt that New York’s upcoming minimum wage crease is an unqualified good. While I’m thrilled that the state is set to pass a minimum wage increase of any kind, the same arguments one would make in favor of raising the wage are the arguments one would make against limiting that raise to the fast food sector.

For starters, by drawing an arbitrary line at the number of locations a business has to have before the rule applies, the proposal gives restaurants with fewer than 30 locations an unfair edge. They benefit from the increased purchasing power of the workers whose wages were raise, while still being allowed to pay their workers less. Minimum wage increases are an exercise in collective action; they work better when the wage floor rises for everyone at the same time.

Proponents of the increase argue that you get part of the way there through wage competition, as businesses in non-fast food industries compete with fast food companies for workers. As Irene Trung, a policy researcher for the National Employment Law Project, told The New York Times:

It would be very attractive for somebody working at the Gap, making around $9 an hour, to look across the street and see Chipotle paying $2 or $3 or $4 more and decide that they would rather work at Chipotle.

But if that’s the case, and you expect wages to rise through competition, why not raise the wage to $15 across the board? In both economic and moral terms, why does it make sense to raise the wage for workers at McDonald’s but not at Foot Locker?

The political answer would seem to be that the squeaky wheel got the grease. Fast food workers are getting a minimum wage increase because fast food workers went on strike.

Minimum wage strike, via Creative Commons

Fast food worker strike, via Creative Commons

The specificity of the increase could potentially provoke what would no doubt be a fascinating debate over what constitutes “fast food.” While the rule only applies to chains with over 30 locations, and most restaurants with over 30 locations fall into the category of what we would normally consider to be “fast food,” what about coffee shops like Starbucks? What about restaurant chains like T.G.I. Fridays? Even if they sell food and have more than 30 locations in the state, can they make a case that the rule doesn’t apply to them because they are in a fundamentally different industry than Burger King?

A slightly more minor concern is that raising the minimum wage to $15 across the entire state doesn’t make sense because New York City isn’t like Buffalo. Previous proposals to raise the minimum wage in the state have suggested steeper increases for the five boroughs, and none have approached $15. So if the minimum wage increase is too specific in targeting fast food workers, it could also be too broad in blanketing the whole state. However, while upstate employers are concerned that $15 will have a much greater effect on them than it will in the Big Apple — the median wage in Utica is already less than $16 — Trung pointed out that $15 is barely enough to get families off of public assistance as it is. Given how long overdue the state (and country) is for a raise, there is plenty of room for wage growth before the costs outweigh the gains.

At the end of the day, this is a major and long overdue win for workers. But supporters of raising the wage need to be careful. If the particulars of this wage experiment cause it to go south, it could make it harder for the movement to make more comprehensive gains elsewhere.

Jon Green graduated from Kenyon College with a B.A. in Political Science and high honors in Political Cognition. He worked as a field organizer for Congressman Tom Perriello in 2010 and a Regional Field Director for President Obama's re-election campaign in 2012. Jon writes on a number of topics, but pays especially close attention to elections, religion and political cognition. Follow him on Twitter at @_Jon_Green, and on Google+. .

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8 Responses to “New York set to raise minimum wage to $15 for fast food workers”

  1. Strepsi says:

    I always think that when I see a Costco or Walmart or H&M… you should not be able to buy a new shirt for $7 in North America, ever, under any circumstances. Those days are coming to an end I think, like fast food: things that are soooo fast and cheap and direly exploiting someone somewhere.

  2. SkippyFlipjack says:

    Maybe use another metric then, but the restaurant business is one with pretty tight profit margins and most restaurants don’t succeed, so it seems likely to be an issue if the minimum wage in rural areas isn’t in line with local costs of living.

    That said, it seems like it shouldn’t be too tough to figure out whether this is an actual concern. Some enterprising reporter could check out some census numbers, find out where either the cost of living or median wage is lowest in New York State, and canvas a number of local businesses to find out how/whether they’ll be affected by the wage changes, based on what they pay their employees now.

    I thought this piece of crap reporting from Fox recently was interesting. See how many factual errors, innuendo and unsourced or unproved allegations you can find. Funny if it weren’t so sad, like the idea that a $15 minimum wage in Seattle has already caused restaurants to close (zOMG!!!!!) — except that the minimum in Seattle won’t be $15 until 2019 and none of the (unnamed) restaurants that have closed in the three whole months since the minimum went up to $11 would say that the new minimum wage had anything to do with their closing.

  3. nicho says:

    So, two family members working full time at a fast food restaurant would just about make the average rent for apartments within 10 miles of NYC. Yay. Now, if they want to eat or anything, tough luck.

  4. nicho says:

    Actually, there’s no evidence that paying restaurant workers a living wage causes restaurants to close. You may hear that from the Restaurant Association, but they are out and out liars. They’ve been caught in their lies in the past and continue to publish them. They are extremely right wing and are in the pocket of the US Chamber of Commerce.

  5. newbroom says:

    It’s like raising fossil fuel taxes. Maybe we’ll think twice about eating fast food if we have to pay living wages, just like we don’t go joy riding as much when gasoline is more costly at the pump. The real costs are less obvious. Let them build solar energy panels.

  6. Bill_Perdue says:

    The solution, from the point of view of workers and the left, is a federal constitutional amendment pegging pay for workers – including student and retired workers – at same level as the wages and benefits of the best union contracts, and that guarantees socialized medicine, free education all the way and interest free homes.

    The left and the union left began the fight for $15, union recognition and 40 hours pay even if workers are only allowed 30 hours of work. That fight will continue in spite of the efforts of Democrats and Republicans try to stop it or dilute its outcome.

  7. SkippyFlipjack says:

    Ultimately I’m not sure how much of a win this is for workers. When restaurants in Utica start closing because the economy isn’t ready to support a $15 minimum, the right will have lots of grist for “Told you so’s” even as things are improving for workers in NYC.

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