The backlash is growing against the recommendation from Governor Andrew Cuomo’s handpicked Wage Board for a minimum hourly wage hike of 70% for many fast-food workers. Interestingly, the complaints now are coming from people who are on both sides of the issue. Reaction Friday was strong less than 48 hours after the board recommended to acting State Labor Commissioner Mario J. Musolino (right), a Cuomo appointee who has spoken in favor of an increase, a phased-in program.
Specifically, the first increase should come by December 31, raising the minimum in New York City to $10.50 and in the rest of the state to $9.75. The wage in the city then would rise in increments of $1.50 a year for the next three years, until it reaches $15 by the end of 2018. In the rest of the state, the hourly wage would rise each year, reaching $15 on July 1, 2021.
Many workers at first happy that momentum was swinging their way now are complaining, after learning of the phase-in idea, that the increase will take too long to implement and will be overtaken by inflation before 2021. On the flip side, industry groups are complaining that the recommendations are financially onerous, discriminatory and politically motivated.
The International Franchise Association (IFA), which represents tens of thousands of major chain restaurants and their franchisees, said the decision could lead to widespread job losses and business closings.
“This outlandish recommendation should be seen for what it is: a big favor to Big Labor. While Governor Cuomo burnishes his political credentials, hundreds of small businesses and the thousands of people they employ will bear the consequences of this bad policy,” Employment Policies Institute research director Michael Saltsman said in a statement. “New York is the first state to push a $15 minimum wage specific for the fast-food industry, and it will soon be the first to find out why that’s a bad idea.”
The singling-out of the fast-food sector, and the very specific Cuomo decision to target chains operating 30 or more venues, also was ripped by Steven Caldiera, president of the IFA, who said, “If Governor Cuomo wishes to advance a wage increase, it should cover all of New York’s businesses, not just a select few. IFA, along with the Coalition to Save New York Restaurants, will aggressively fight Governor Cuomo’s politically-motivated decision to discriminate against local franchise small business simply to satisfy the request of his allies at the Service Employees International Union (SEIU).”
The latter is a reference to the fact Cuomo appointed the board after the SEIU organized labor group spent several years targeting major fast-food chains and spending tens of millions of dollars sponsoring protests and creating worker coalitions to lobby and petition for increases. The SEIU, which mostly represents health care workers but obviously is spreading its influence, has long been an ardent supporter of Cuomo in his political career.
The makeup of the supposedly neutral Wage Board is telling: Buffalo Mayor Byron Brown, supposedly representing the public, Gilt Groupe head Kevin Ryan representing business, and Mike Fishman representing labor. Both Brown and Ryan long publicly lobbied for a minimum wage increase before being picked by Cuomo. Fishman’s sympathies are obvious. He is SEIU’s secretary-treasurer.