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New York State Department of Labor “Fast Food Wage Board”

Presented by
Kenneth J. Pokalsky
Vice President

June 22, 2015

The Business Council is submitting these comments for consideration by the members of the “fast food wage board,” and will be submitting detailed written comments prior to the June 26 deadline.

The Business Council is New York’s largest statewide employer association. We represent about 2,400 private sector employers, employing an estimated one million New Yorkers, as well as a number of local chambers of commerce, and other business interests across the state.

Even this wage board is only addressing “fast food” employers and certain fast food occupations, it is being watch carefully and with great concern by employers in many sectors.

In summary, The Business Council does not support using an administrative wage board to impose a minimum wage increase. Our concerns include the following.

This is precedent-setting. This current wage initiative would be the first time since the 1962 restructuring of the state’s minimum wage law that an administrative wage order is being used to set mandated wages above the state’s statutory level.

Despite its narrow focus, most expect this wage board’s work to serve as the template for future wage board action. Under state labor law, this unilateral authority can be applied to any industry or any occupation. While relatively few New York employers pay the minimum wage, a significant increase in the minimum hourly pay rate, to $15 per hour, would have wide spread impacts for many private and public employers.

We strongly believe that the legislature is the proper venue for this type of policy-making, and in fact the New York State legislature has adopted 22 minimum wage increases since 1962. A three step increase was adopted in 2013, and will not be fully phased in until the end of 2015. Importantly, the state legislature can make other law changes – as it did in 2013 – intended to mitigate any adverse impact of a mandatory wage hike on employers; measures that are beyond the authority of a wage board and the commissioner of labor.

A large percentage of minimum wage workers in the U.S. are not members of low-income households. In February 2014, the Congressional Budget office issued a report showing that less than 20 percent of the benefits of a federal minimum wage increase goes to households with income below the federal poverty threshold, while 30 percent goes to households with income three times the poverty level and higher, with the largest share going to middle and upper middle class families.

The data provided to wage board members by the Department of Labor likewise illustrates that many fast food workers in New York are young, and unlikely to be heads of households. Just over 40 percent of all workers in this sector are under the age of 24, more than three times the concentration of young workers than found in all occupations in New York State. In closing, The Business Council believes that the state’s long-term future requires improvements in the state’s overall economic competitiveness. Imposing significant new costs on employers, including new or increased wage mandates, is contrary to achieving that objective.

In closing, The Business Council believes that the state’s long-term future requires improvements in the state’s overall economic competitiveness. Imposing significant new costs on employers, including new or increased wage mandates, is contrary to achieving that objective.