New York, University of California adopt $15 minimum wage

Maybe New York’s fast-food workers shouldn’t be celebrating their new $15 minimum wage. While advocates for a higher minimum wage say it will help workers, conservative economists warn not all will benefit.

The same day the state of New York announced its new minimum wage for fast-food workers, the University of California system also announced it will start paying all employees at least $15 an hour.

The raises come amid a growing movement to increase wages for low-skilled workers.

“This is going to spread pretty quickly now across the country,” said Aparna Mather of the American Enterprise Institute. “You will help some workers but you will hurt other people.”

New York will phase in its wage increase over a period of six years. Gov. Andrew Cuomo has already stated his support for the state Wage Board’s decision, which makes New York the first state to single out a single industry for a wage increase, especially of this size.

“New York is absolutely going to get hammered by this,” said James Sherk of the Heritage Foundation. “Businesses don’t have a big jackpot of money sitting somewhere. … They will raise prices.”

If the wage increase had been smaller, businesses might have been able to afford to pay employees more, taking it from their profits, Sherk said. But the New York law will almost double the minimum wage workers now get. Businesses will be forced to raise prices or lay off their least productive workers, who are often the low-skilled earners minimum wage advocates say they want to help.

The decision to raise wages is not confined to New York and the University of California. Los Angeles County voted on Tuesday to raise the minimum wage to $15 dollars an hour within five years, joining cities like Seattle, Chicago, and in California, San Francisco, Oakland, and Berkley. Washington D.C. also approved a proposed ballot measure for a $15 minimum that could go to voters next year.

“This is a movement that is spreading across different cities,” Mather said. “I think people realize it is not going to happen in Congress because of party divisions.”

Fast food workers across the country have staged rallies and strikes, organized by groups like Fight for $15, advocating for a bigger federal minimum wage. Rebecca Cornik, 60, who works at a Wendy’s in Brooklyn, said she will benefit from the results of the Fight for $15 movement: “If I made $15, I could pay my rent on time, I could put food on the table, I could hold my head up.”

Mather doesn’t deny low-income workers have suffered during the recent struggling economy, but she warns the ripple effects of this wage “fix” will be long-ranging.

“At some point, people will realize it isn’t working out. … There are many, many other good policies out there we could be doing,” she said.

The Associated Press contributed to this report.