New York 1st state to OK $15 minimum wage for fast-food employees; to be phased in

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 will 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 also remain committed to raising the federal minimum wage to $12 an hour.

The wage hike 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, the cities of Los Angeles, Seattle, and 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 go 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 that their industry employs more low-wage workers than any other sector of the workforce. They say that unlike landscaping firms or child care services, the fast food business is dominated by multinational companies with billion dollar profits.

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

Pat Pipino, owner of a Ben & Jerry's ice cream shop in Saratoga Springs, 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.

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."

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Klepper reported from Albany, N.Y.