Fast-food workers celebrate plan for $15 wage in New York

Fast-food workers in New York state heralded a proposal to raise their minimum wage to $15 even as restaurant owners vowed to fight what they said would be an arbitrary and damaging increase.



The minimum wage would increase gradually to $15 an hour -- but only for workers in fast-food restaurants with 30 or more locations -- under a plan endorsed Wednesday by a state Wage Board. The proposal now goes to Gov. Andrew Cuomo's labor commissioner, who is expected to approve the increase. Cuomo said he supports the move.



Fifteen dollars represents a significant victory for workers who argue fast-food wages haven't kept up with the cost of living in one of the country's most expensive states.



"If I made $15, I could pay my rent on time, I could put food on the table, I could hold my head up," said Rebecca Cornick, a 60-year-old grandmother who makes $9 an hour at a Wendy's in Brooklyn. "We have worked so hard to make this happen."



But restaurant owners say the increase will backfire by forcing them to consider higher menu prices, reduced hours for workers and even automated fast-food counters that use computers to take a customer's order.



"We're being singled out for an unknown reason," said David Sutz, who along with his partners owns four Burger Kings in Westchester and Dutchess counties. "Unfortunately, I can turn one of my registers into a kiosk and eliminate a position," he said. "Labor is your second most expensive cost in this industry after the product."



An estimated 200,000 workers would be impacted by the increase, which would be phased in over three years in New York City and over six years elsewhere in the state.



San Francisco, Seattle and Los Angeles have approved gradual increases to $15 an hour, and the huge University of California system said Wednesday that it would raise its minimum to $15 for all hourly workers. That group includes students and full-time employees working in dining halls, dorms and bookstores or as gardeners, housekeepers and custodians at campuses and hospitals.



With a large concentration of low-wage workers, the fast-food industry has become a popular target for labor activists who say inexpensive chain restaurants haven't kept up with the cost of living. Fast-food employees themselves have emerged as a potent political force in New York and around the nation.



"You cannot live and support a family on $18,000 a year in the state of New York -- period," Cuomo, a Democrat, said at a Manhattan rally celebrating the proposal. "This is just the beginning. We will not stop until we reach true economic justice."



Franchise owners are now considering whether they could fight the increase in court. Carolyn Richmond, an attorney with New York City-based Fox Rothschild LLP, said she can't see the legal justification for focusing on a single industry.



"This is certainly ripe for challenge," said Richmond, who represents many hospitality businesses including fast-food companies. "It's what legally we call 'arbitrary and capricious.'"



The fast-food industry employs a greater number of minimum-wage workers than other sectors of the economy, according to Michael Reich, a University of California-Berkeley economics professor who has studied the minimum wage.



Entry-level fast-food workers make an average of $16,920 a year, according to state labor statistics. They are twice as likely to receive some type of public assistance. Cuomo said the annual cost of that assistance to taxpayers is $700 million in New York state.



"It accounts for more low-wage employment than any other," Reich said of the industry. "If you're going to pick one sector, it's a strategic one."



The increase now goes to Cuomo's labor commissioner for a final authorization. It does not require legislative approval.



Cuomo called for the creation of the Wage Board after proposals to increase the minimum wage for all workers failed in the Legislature. The three-member panel was led by Buffalo Mayor Byron Brown.



Labor groups held rallies around the state to celebrate the board's vote to endorse the increase. But not all attendees were pleased that the increase will be implemented gradually.



"We have to wait six years for this to happen and we need it now," said Stacey Ellis, who works at an Albany McDonalds. "By the time six years goes by it won't need to be $15. It will need to be something even higher."



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Klepper contributed from Albany.


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