$10? $11.50? $15? New York City pay mandates are a growth industry.
A state bill introduced last week to force large retail and food businesses to pay workers $15 an hour would add to New York’s growing patchwork of wage laws, and could draw national scrutiny if it gains traction.
The existing laws, along with their seemingly interchangeable names—minimum wage, “living” wage, “fair” wage, prevailing wage—apply to different businesses depending on their circumstances.
Last year’s increase of the state minimum wage to $9 in 2016 opened the door for liberal activists to inflate pay beyond the state minimum (and above the $10.10 President Barack Obama has proposed nationally). Earlier this year, Mayor Bill de Blasio tried to persuade Gov. Andrew Cuomo to allow him to raise the city’s minimum wage to $11 an hour, but the governor shot him down.
The mayor is also pushing to expand the city’s living-wage law, which requires firms that receive $1 million in taxpayer subsidies to pay their workers $10 an hour with benefits—or $11.50 without. Prevailing wages must already be paid to skilled laborers on public-works projects. (For bricklayers, for example, it is $46.44 an hour.)
The legislation introduced last week by a small band of Democratic state lawmakers is also being called a living wage—a “real living wage” or “fair wage,” as activists dubbed it—but it would apply to chain stores with annual revenue in excess of $50 million or with 10 or more stores nationwide, as well as transportation businesses. The $15 floor would be indexed to inflation.
The bill is aligned with a national campaign to beef up pay for low-wage fast-food employees, car-wash attendants and airport workers. (Earlier this year, the Port Authority directed airport contractors to phase in a $10.10-per-hour wage floor.) Supporters say there is evidence that shows workers at big-box stores and fast-food businesses earn so little that they must rely on food stamps and other welfare programs.
“The concept that in 2014 in New York state, you could be working full time for a large, successful corporation and be living in poverty—it’s beyond insulting,” said state Sen. Liz Krueger, a co-sponsor of the legislation.
|U.S. minimum wage
|State minimum wage
|State minimum wage, 2016
|New York City “living” wage
|Barack Obama’s proposal for U.S. minimum wage
|Bill de Blasio’s proposal for city’s minimum wage
|State Dems’ “fair” wage
|New York City prevailing wage
||$35.90 for asbestos handlers,
$44.39 for mosaic mechanics
Wal-Mart and McDonald’s were the two corporations cited most frequently by the bill’s supporters, but national chains Jiffy Lube, H&R Block, UPS and a variety of hotels, automotive shops and gyms would also be affected. Other cities have passed similar measures, including SeaTac, a Seattle suburb where voters approved a measure to raise wages for hotel and transportation workers near Seattle-Tacoma International Airport to $15 an hour.
“Politicians are looking for short cuts to solving income inequality,” said Kathryn Wylde, president of the Partnership for New York City. “The unfortunate reality is that there are no quick fixes, and some of the proposals will simply make the problem worse, benefiting a few at the expense of many others.”
The law’s real-world application complicates the debate. Though it targets McDonald’s, franchisees would be the ones on the hook for paying $15 wages. Matt Haller, vice president of the 50-year-old International Franchise Association, said that franchisees, many of them small business owners, would struggle to meet that requirement.
Advocates argue that franchise owners could rework their contracts with their parent corporations to help account for the payroll increase. But Mr. Haller said that could run afoul of a number of laws, as well as the 10- to 20-year contracts between corporations and their franchisees. “You can’t change a franchise agreement once it’s been agreed to,” he said.
But Barry Saltzman, a labor attorney at Pitta & Giblin, called that a straw argument. “The franchisor and the franchisee negotiate, and they can reach agreements,” Mr. Saltzman said. “When push comes to shove, these are the kind of companies that can bear the cost and are not likely to abandon the New York market, which is kind of lucrative.”
The bill is unlikely to go anywhere in the Senate, which is controlled by a coalition of Republicans and independent Democrats. Last year’s minimum-wage hike was approved only after stretching out the increase over three years and exempting certain sectors.
But Mr. Cuomo, who is hoping to win re-election by historic margins, is under pressure from the left after passing a budget that cut taxes for corporations. And if the rival Democratic factions in the Senate get back together, the wage bill could pass.
Both Mr. Cuomo and Senate co-leader Jeff Klein are reviewing the bill, according to their spokesmen.
State Sen. Daniel Squadron, a bill co-sponsor, claimed the living-wage legislation would most benefit suburban communities represented by Republican lawmakers, where many of the state’s big-box stores and chain restaurants are located.
“I can’t imagine why Senate Republicans wouldn’t want their constituents, who are working hard to support their families, to be unable to do so,” Mr. Squadron said.