Increase in NY Minimum Wage to $15 Can Backfire in More Ways than One

The opening statement from the NY Times is a bit of a reach but this move will have negative repercussions for certain franchise sectors.

The labor protest movement that fast-food workers in New York City set off nearly four years ago has led to higher wages for workers all over the country. On Wednesday, it finally paid off for the people who started it.

From a political standpoint this move could hurt the Governor who has taken some positions that has miffed progressives. Now he'll face the wrath of small business owners in addition to a lawsuit from industry associations.

A panel appointed by Gov. Andrew M. Cuomo recommended on Wednesday that the minimum wage be raised for employees of fast-food chain restaurants throughout the state to $15 an hour. Wages would first be raised in New York City and then the rest of the state.

I read some so called liberal economists who believe the magnitude of this increase will cost thousands of jobs. Also, look for the development and introduction of automated ordering in the large QSR chains to gain momentum. 

The $15 wage would represent a raise of more than 70 percent for workers earning the state’s current minimum wage of $8.75 an hour. Advocates for low-wage workers said they believed that the mandate would quickly spur pay raises for employees in other industries across the state.