Thanks to Governor Cuomo’s fast-food minimum wage board, a three-member panel charged with coming to a pre-determined conclusion on a wage hike, your entry level McDonald’s worker will soon be making $15 an hour, the same hourly rate as a paramedic.
Via the Wall Street Journal:
New York state’s fast-food wage board on Wednesday is expected to recommend raising the fast-food minimum wage to $15 an hour, and the state’s labor commissioner is expected to approve that recommendation, according to a person familiar with the board’s plans.
The move is fairly unusual: While other cities have raised the minimum wage to $15, it is uncommon for a state to do so for only one industry.
“We’re all scared, I have to admit,” said franchise owner David Sutz, 58, who began working in fast food in 1977, as a manager trainee, and now co-owns four Burger Kings. “We in the New York market are very, very concerned that a lot of us may not survive over the next year.”
The current minimum wage in New York is $8.75, which is set to rise to $9 by year’s end. A leap from $9 to $15 is astronomical from a business sense, and will lead to job losses, reduced work hours, and closed franchise locations. It’s a move that only an anti-business extremist would make. To put this in perspective, the entry-level burger flipper will now make the same or a higher wage than paramedics in western New York.
Via the Watertown Daily Times:
The hourly wage of a cashier at McDonald’s soon could be equal to that of a Watertown paramedic.
David C. Roof, president of the Town of Watertown Ambulance Service Inc., said the average hourly wage of the service’s paramedics is about $15. The new minimum fast food wage proposed by Gov. Andrew M. Cuomo would match that.
Considering the hours of constant training and danger paramedics are subjected to while on the job, Mr. Roof said giving fast food workers the same pay is unfair.
“I don’t want to take anything away from those people in fast food, but I think the government should take a look at the people who save lives on the street and are in danger all the time,” Mr. Roof said.
Meanwhile, fast-food franchise owners are now putting up a legal fight. They’ve hired “bare-knucles lawyer” Randy Mastro to challenge the legality of raising the minimum wage in such a manner. “These businesses are franchises,” Mastro told Crain’s New York. “They are locally owned, many of them minority- and women-owned businesses. These are small-business owners with low margins who are trying to survive. This literally puts their business in jeopardy.”
Another report from Crain’s indicates that the mere mention of a $15 minimum wage “triggers panic among New York City restaurateurs.” One owner of the BLT restaurant chain said it’s “enough to send a restaurant from being profitable to losing money.”
Academic studies confirm the accuracy of this criticism of minimum wage hikes. In 1995, University of California-Irvine economics professor David Neumark and Federal Reserve governor William Wascher analyzed payroll records of fast-food restaurants in New Jersey counties and neighboring counties across the state line with Pennsylvania, to determine what, if any, effect New Jersey’s 1994 minimum-wage increase had on entry-level employment trends. They found confirmation of the common wisdom that increasing the cost of entry-level labor results in increased unemployment and forces entry-level workers—often, the young or ethnic minorities—to seek employment in other geographic areas with fewer market distortions.
This ad from EPI also shows the predictable consequence of a $15 minimum wage for fast-food restaurants: Touch-screen ordering systems that replace employees.