In a sign that the U.S. labor rights movement continues to gather steam, Governor Andrew M. Cuomo, a Democrat, announced today that he'll seek to raise New York's minimum hourly wage to $15 for all workers, making it the highest base rate of pay for any state in the nation. Three cities, Seattle, San Francisco, and Los Angeles, have already passed laws enacting that same minimum, but New York is the first state to seek a $15 wage.
"You cannot support a family on $18,000/year in New York State, not to mention have a decent living," Cuomo said in a speech at the Jacob Javits Center, with U.S. Vice President Joe Biden at his side. "If you work full time, you shouldn't have to choose between paying the rent and buying food."
The New York State minimum is now $8.75, and will rise to $9 in January, which works out to an annual salary of about $18,720, assuming a 40-hour schedule for 52 weeks per year. A $15 wage, the goal of "Fight for Fifteen" movement that has fueled demonstrations and walkouts at fast food establishments throughout the country, equates to a salary of about $31,000 per year.
In a release following the speech, the Governor's office described the wage hike as "all-industry" and said it would apply to "all workers," indicating the $15 minimum might effectively abolish the tip-credit and therefore raise the salaries of waiters, bussers, and bartenders as well. Employers normally pay those workers a lower cash wage known as the tipped-minimum, set at $5 in New York, because gratuities often bring the pay of those staffers well past the full minimum. Cuomo's press office did not immediately respond to an email inquiry asking whether the tip credit would be eliminated. Tipped-employees in seven states — California, Washington, Oregon, Alaska, Nevada, Minnesota and Montana — already earn the full-minimum.
Raising the hourly minimum to $15 will come as a boon to many in the hospitality industry, who occupy some of the lowest paying jobs in the economy. Although wait captains at Manhattan's best restaurants can easily clear over $100,000 per year, an average server in the greater New York-metropolitan area makes $13.21/hour after tips, per the U.S. Bureau of Labor Statistics; that number drops to $12.16 if one expands the parameters to upstate. NYC-area cooks, in turn, make about $13.41 per hour, while dishwashers generally earn $9.66.
Some of those wages are already set to rise. After Cuomo's proposal to hike the minimum to $11.50 in the city and $10.50 in the rest of the state was stymied by the Republican-controlled Senate, the governor convened a wage board to look into the wages of fast food workers. This summer, that board voted in favor of a plan to raise the minimum pay for employees of Burger King, McDonald's, Taco Bell, and other chains with 30 or more nationwide locations to $15/hour, by 2018 for NYC and by 2021 for the rest of the state. Cuomo announced today that the state's labor commissioner has approved that plan. One of the spillover effects of this law is that virtually all New York restaurants will end up having to raise wages to avert defections to the fast food industry with its more attractive wage scale.
The Governor has also used a wage board to increase the tipped minimum, which will increase to $7.50 in January. But while New York State law gives Cuomo the authority to call for wage increases in specific industries through such boards, he'll need legislative approval for a $15 minimum for all workers. If his plan goes through, the schedule of wage hikes would mirror the yearly increases for the fast food industry.
Business groups often oppose minimum wage hikes, arguing that it forces employers to pass along the higher labor costs to consumers in the form of price hikes. They also say it causes businesses to cut back on hourly staffing and reduce hiring. Proponents of such measures say higher minimums increase employee retention, decrease worker reliance on taxpayer subsidized public assistance programs like food stamps, and stimulate consumer spending throughout the economy. So far, the rising minimums in San Francisco and Seattle don't appear to have prompted significant layoffs or closures in those cities' hospitality industries.
The federal minimum is currently $7.25/hour, where it has remained since 2009. President Barack Obama's proposal to raise that minimum to $10.10 has foundered in Congress; Biden and other democrats have since expressed support for a higher $12 minimum.