New York state OKs $15 minimum wage for fast-food workers

New York state will gradually raise the minimum wage for fast-food workers to $15 an hour — the first time any state has set the minimum that high.

Gov. Andrew Cuomo's administration formally approved the increase Thursday, a move the Democratic governor announced at a labor rally with Vice President Joe Biden. Cuomo said he would work to pass legislation setting a $15 minimum for all industries, a promise that comes as more and more cities around the country move toward a $15 minimum wage.

"Every working man and woman in the state of New York deserves $15 an hour," the governor told the enthusiastic crowd of union members. "We're not going to stop until we get it done."

Biden predicted the $15 wage for fast-food workers would galvanize efforts across the country.

"You're going to make every single governor in every single state in America look at themselves," he said at the rally in New York City. "It's going to have a profound impact."

He said he and President Barack Obama remain committed to raising the federal minimum wage to $12 an hour.

The wage increase for fast-food workers in New York will be phased in over three years in New York City and over six years elsewhere in the state. It will apply to some 200,000 employees at large chain restaurants.

So far, Los Angeles, Seattle, San Francisco and the California cities of Oakland and Berkeley have approved phased-in increases that eventually will take their minimum wage to $15 an hour, or about $31,200 a year.

New York's increase was recommended by an unelected Wage Board created by Cuomo — a tactic that allowed the governor to circumvent the Legislature, where the Republican-led Senate has blocked big increases in recent years. The current $8.75 minimum is already set to rise to $9 at year's end under a law passed by lawmakers in 2013.

Republicans held a hearing Thursday into the process behind the fast-food wage increase, which some restaurant owners have said they may challenge in court.

Fast-food workers had pushed for the increase, noting their industry employs more low-wage workers than any other sector of the workforce. They say that unlike landscaping companies or child care services, the fast-food business is dominated by multinational companies with billion-dollar profits.

Some business groups, however, said Cuomo's proposed hike was too aggressive.

"A precipitous increase that threatens the most vulnerable businesses and employees would not find a lot of supporters in the business community," Kathryn Wylde, president of the Partnership for New York City, told Reuters.

Franchise owners say the increase singles them out and gives an unfair advantage to mom-and-pop competitors that won't have to raise wages.

Pat Pipino, owner of a Ben & Jerry's ice cream shop in Saratoga Springs, New York, said some franchise owners could be forced out of business by the increase. He predicted that others may be forced to raise prices or cut positions to absorb the higher labor costs.

"By executive fiat, with the stroke of a pen, our financial model goes to pot," he said.

Opposition by business groups and Senate Republicans will pose a significant hurdle for Cuomo's proposed $15 minimum for all workers.

"Raising the wage floor in New York that far that fast could lead to unintended consequences such as severe job losses and negatively impact many businesses who are already struggling just to keep their heads above water," said Republican Senate Leader John Flanagan of Long Island.

But Cuomo pledged to prove naysayers wrong.

“We will overcome the skeptics and demonstrate to the American people that we can make this a better place because New York is the state of possibility,” Cuomo said in a press release. “We can restore hope and opportunity, and we will do it with a $15 minimum wage that ensures economic justice for all.”

Democrats in the state Assembly and New York City Mayor Bill de Blasio have long supported a $15 minimum. On Thursday, de Blasio welcomed Cuomo's call for a higher minimum wage and said he would "urge Albany to act quickly."

Al Jazeera and wire services