Governor Cuomo Instructs State Labor Department to Convene Wage Board to Investigate and Make Recommendations on Raising Minimum Wage For Fast Food Workers
Acting Labor Commissioner Musolino Appoints Wage Board; Recommendations Expected By July
Governor Andrew M. Cuomo recently instructed Acting State Labor Commissioner
Mario J. Musolino to empanel a Wage Board that will investigate and make
recommendations on an increase in the minimum wage in the fast food industry.
The Wage Board will take approximately three months to examine the issue
and make recommendations regarding a possible increase. Those recommendations
are expected by July, and do not require legislative approval in order
to become enacted.
Under New York State law, a Wage Board can suggest changes to the minimum
wage in a specific industry or job classification if it finds that wages
are insufficient to provide for the life and health of workers within
that industry or classification. Despite being a well-established and
thriving multi-billion dollar industry, the fast food sector employs tens
of thousands of minimum wage workers in New York State – the vast
majority of which are women, primary breadwinners for their households,
and recipients of welfare or other forms of public assistance.
“If you work full time, you should be able to provide for yourself
and your family and move beyond poverty. That is what the minimum wage
is all about, but for too many fast food workers in New York today that
is simply not the case,” Governor Cuomo said. “The minimum
wage must be a wage that allows for a decent living – not one that
condemns hard-working people to an endless cycle of poverty and government
assistance – and that is why I am taking this action. We must fulfill
the promise of honor and justice for fast food workers in New York, and
I urge the Wage Board to stand up for what is right and help us move forward.”
To read Governor Cuomo’s full op-ed announcing his instructions to
Acting Labor Commissioner Musolino, please click
here.
"This is a day of hope and inspiration for underpaid Americans, not
just in New York but across the nation,” said Mary Kay Henry, International
President of the Service Employees International Union (SEIU). “Fast
food cooks and cashiers who are fighting for $15 and the freedom to form
a union have shown that when working people stick together, our voices
are heard. Working moms and dads are fed up with big corporations like
McDonald's making big profits and paying poverty wages that slow down
our economy. Governor Cuomo’s leadership will open the way to raise
their wage floor to $15, re-balance our economy, and strengthen communities."
“Today, Governor Cuomo and New York State are leading the way and
offering hope and a path forward for the close to 200,000 fast food workers
in New York, along with the millions of others in our country making too
little for too long,” said Hector Figueroa, President of 32BJ SEIU.
“$15 and a union would lift thousands of moms and dads out of poverty,
inject hard-earned dollars into communities across the state and build
momentum in the fight for fair wages for airport workers and other low-wage
workers. Raising the wage for fast food workers is good for communities,
good for the economy, and good for New York. We applaud Governor Cuomo
for taking this important step forward.”
“This is an historic opportunity for fast-food workers," said
Flavia Cabral, a 53-year-old McDonald's worker and mother of two from
the Bronx who hopes one day to send her kids and grandkids to college.
“No one in New York can survive on $8.75 an hour, so we've been
on strike nine times. All we've ever asked for is a fair shot at the
middle class and a chance to provide for our families. Today, Governor
Cuomo heard us— and soon, I know we're going to get to $15.
I am inspired today, because $15 an hour would completely change my family’s
life."
The minimum wage must be a wage that allows for a decent living – not one that condemns hard-working people to an endless cycle of poverty and government assistance – and that is why I am taking this action.
Appointing the Wage Board
As required by statute, the state labor commissioner will call a wage
board as he has determined the wages for fast food workers in the hospitality
industry are inadequate. His full determination can be found
here.
The board, made up of at least three members with equal representation
from labor, businesses and the public, will review adequate minimum wages
and regulations for fast food workers and make a recommendation to the
commissioner. The Wage Board members will be Byron Brown, Mayor of Buffalo,
representing the public; Kevin Ryan, Chairman and Founder of Gilt, MongoDB,
Business Insider and Zola and Vice Chairman of the Partnership for New
York City, representing businesses; and Mike Fishman, Secretary-Treasurer
of the Service Employees International Union, representing labor.
In accordance with statute, the Wage Board will hold two public hearings
– the first in Buffalo and the second in New York City. The board’s
final recommendation is expected by July. The commissioner will then have
45 days from its receipt to issue an order.
A complete schedule of public hearings and meetings will be announced soon.
Building on Past Progress
Governor Cuomo has consistently fought to increase the minimum wage in
New York State.
In 2013, the Governor signed legislation that raised the minimum wage from $7.25
to its current level of $8.75. That legislation included another incremental
increase to $9.00 that will take effect by the end of 2015. Continuing
to build on that progress, the Governor launched the
“Fight for Fair Pay” campaign earlier this year to support his proposal (originally announced
as part of his
2015 Opportunity Agenda) to further increase the minimum wage in New York State. That proposal
would bring the minimum wage to $10.50 statewide and $11.50 in New York
City where the cost of living is higher.
This is also the second time that the State Department of Labor has empaneled
a Wage Board under Governor Cuomo. In
July 2014, the Governor directed the Department to convene a Wage Board to review
and recommend any changes to the relevant regulations for food service
workers and service employees (tipped workers) in New York State. As a
result of that Wage Board, the tipped cash wage amounts for tipped workers
will increase from their current rates of $4.90, $5.00 and $5.65 –
rates which have not increased since 2011 – to $7.50 per hour on
December 31, 2015. More information on the recommendations that the Department
of Labor accepted from that Wage Board to benefit tipped workers can be found
here.
The Facts
In New York State, entry-level fast food workers earn approximately $16,920
per year – an amount that is well below the poverty line for a family
of three and just $1,010 above it for a family of two.
1 Additionally, despite New York’s recent success in increasing the
minimum wage, the minimum wage for fast food workers across the nation
has barely moved – increasing just 0.3 percent since 2000 (adjusting
for inflation).
2 By comparison, earnings for the average fast food CEO have more than quadrupled
since 2000 (adjusting for inflation), to an average of $23.8 million in 2013.
3
The negative societal impact of the low wages earned by workers in the
fast food industry is amplified by the demographic breakdown of the industry’s
labor force. More specifically:
- 73 percent of fast food workers are women, 70 percent are over the age of 20, and more than two-thirds are raising a child and are the primary wage earners in their family. 4
- Fast food workers are twice as likely to be receiving public assistance compared with all working families. 5
- 52 percent of all fast food workers nationwide – the highest rate of any industry – have at least one family member on welfare, which costs taxpayers $7 billion annually in public assistance. 6
- In New York State, 60 percent of all fast food workers have at least one family member on welfare. New York also ranks first in public assistance spending per fast-food worker, at $6,800, which costs taxpayers $700 million annually in public assistance. 7
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1. New York State Department of Labor. Occupational Wages.
https://labor.ny.gov/stats/lswage2.asp
2. Demos. Fast Food Failure: How CEO-To-Worker Pay Disparity Undermines
the Industry and the Overall Economy. By Catherine Reutschlin. 2014
3. Demos. Fast Food Failure: How CEO-To-Worker Pay Disparity Undermines
the Industry and the Overall Economy. By Catherine Reutschlin. 2014
4. UC Berkeley. Fast Food, Poverty Wages: The Public Cost of Low-Wage
Jobs in the Fast-Food Industry. Sylvia Allegretto, Marc Doussard, Dave
Graham-Squire, Ken Jacobs, Dan Thompson, Jeremy Thompson. 2013
5. UC Berkeley. Fast Food, Poverty Wages: The Public Cost of Low-Wage
Jobs in the Fast-Food Industry. Sylvia Allegretto, Marc Doussard, Dave
Graham-Squire, Ken Jacobs, Dan Thompson, Jeremy Thompson. 2013
6. UC Berkeley. Fast Food, Poverty Wages: The Public Cost of Low-Wage
Jobs in the Fast-Food Industry. Sylvia Allegretto, Marc Doussard, Dave
Graham-Squire, Ken Jacobs, Dan Thompson, Jeremy Thompson. 2013
7. UC Berkeley. Fast Food, Poverty Wages: The Public Cost of Low-Wage
Jobs in the Fast-Food Industry. Sylvia Allegretto, Marc Doussard, Dave
Graham-Squire, Ken Jacobs, Dan Thompson, Jeremy Thompson. 2013