Good Evening
Good Evening

LI employers worry about ripple effect from $15 fast-food wage

Leisa Dent, seen on July 23, 2015, co-owner

Leisa Dent, seen on July 23, 2015, co-owner and chef of LL Dent Restaurant in Carle Place, said she understands workers' need for a living wage, but said the wage increase could hurt small businesses like hers. Credit: Uli Seit

Raising New York's minimum wage for fast-food workers to $15 an hour, as a state panel has recommended, would have a ripple effect by creating upward pressure on salaries in other industries, experts said.

Advocates argue that's a good thing.

"The increase in wages for fast-food workers will spread to higher wages for other low-wage workers, whose employers will need to match the raises," said Michael Zweig, director of the Center for the Study of Working Class Life at Stony Brook University. That's good for the broader economy, he said.

But some Long Island business owners worry they won't be able to compete for labor.

"If you are going to work at McDonald's or a small restaurant, a small restaurant can't afford $15 an hour for a dishwasher," said Leisa Dent, co-owner and chef of LL Dent Restaurant in Carle Place. "What's next? My cooks asking for $22?"

Dent employs 10 people who she said earn more than the state minimum wage of $8.75.

The state fast-food wage board this week recommended that workers at fast-food chains with 30 or more locations across the country be paid a minimum of $15 per hour by 2021.

If the board's proposal is accepted, about 24,000 workers at 2,000 or so fast-food establishments in Nassau and Suffolk counties would be affected.

Debate on wider effects

Experts were divided over the broader economic impact.

Liberal economists predicted that employees earning more will spend more, boosting sales and jobs at other businesses. Their conservative counterparts warned of higher prices for fast-food meals that would lead to reduced consumer spending, revenue and jobs.

Gov. Andrew M. Cuomo, who ordered the board to be appointed in May and quickly embraced its recommendations this week, called for extending the wage floor to more workers.

"We will not stop until we reach true economic justice and we raise the minimum wage for every worker in every job in this state," he said.

Even without such action, experts see a ripple effect on pay for security guards, store clerks, home health care aides and other jobs.

Julie Marchesella, owner of the Queen of Hearts clothing boutique in Merrick and president of the Nassau Council of Chambers of Commerce, said workers besides those in fast food would demand higher wages. The raises would also increase the Social Security and unemployment insurance contributions paid by employers.

To keep their more than 150,000 workers in the metropolitan area, home health care agencies would have to boost pay to $17 an hour from the current average of $10 or more, said Carol Rodat, state policy director for the Paraprofessional Healthcare Institute, a Bronx-based advocacy group.

'This will change my life'

Supporters said the fast-food raise, which would come in steps, is good for workers and businesses.

"It could really be something to boost the employees' productivity," said Phil Andrews, Long Island African American Chamber of Commerce president.

Zweig, the Stony Brook University economist, added that increased pay for fast-food workers would boost the overall economy because consumer spending would climb. Seventy percent of all economic activity derives from consumer expenditures, he said.

"If workers are paid more, they spend more," Zweig said. "When they spend more, they generate more demand for products that will be supplied by companies who will create new jobs to meet the new demand."

That's the plan of Yancy Rivera, 35, a Nassau County resident who has worked at a local McDonald's for 11 years and earns $9.50 per hour.

"This will change my life and my family's life forever," Rivera said. With more money, she would give her small son a proper birthday party, provide clothes for her older child and pay medical expenses, she said.

Opponents of raising the minimum wage said it would disproportionately fall on small businesses. About 94 percent of New York's fast-food restaurants are independent or franchisee-owned, according to the National Restaurant Association.

"We are going to have to reduce staff because we can't afford an ongoing increase with the kind of businesses that we have," said Laura Jankowski, a Tropical Smoothie Cafe franchisee in Port Jefferson Station, Syosset and Merrick.

Some low-wage workers worry about that kind of employer response, and said it could make them think twice about changing jobs just to pursue a higher hourly rate.

Dixon Sanchez, 27, said he had considered leaving the Sunglass Hut in Bay Shore's South Shore Mall, but worries that the chain restaurants will fire employees and reduce the work hours of others to contain costs.

The Brentwood resident said of the wage increase: "It's not really a big change if they're allowed to maneuver around it by changing their operations."

With Maxwell Radwin

More news