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N.Y. Restaurant Owners Plead for Mercy as Gov. Cuomo Tightens Screws on Wages

Organized labor, fast food workers and elected officials gather July 12, 2015, to celebrate the New York State Department of Labor wage board's recommendation for a $15 per hour minimum wage statewide by 2021. (a katz/Shutterstock.com)

More than 100 restaurant owners in the state of New York are begging Gov. Andrew Cuomo (D) not to force them to pay their waiters and waitresses $15 an hour. But it’s doubtful he heard them over the roar of union workers at rallies Jan. 4 supporting Cuomo’s call for a statewide $15 an hour minimum wage.

Melissa Fleischut, president and CEO of the New York State Restaurant Association, can see the $15 an hour wage coming, but she’s hoping for a five-year moratorium for people who make their livings on tips.

She said her organization’s members would be crushed by a $15 an hour wage mandate, on top of the 50 percent increase in wages for what are known as “tipped workers” that went into effect the last day of December 2015.

The cash wage for tipped employees was raised from $5.00 to $7.50 on Dec. 31.

“The industry needs time to adjust to this dramatic increase,” Fleischut said.

She warned that if Cuomo follows the Dec. 31 raise with a mandate to double wages for tipped workers, the same people Cuomo says he wants to help are going to lose their jobs.

Fleischut said restaurant owners were already looking for ways to cut back because of the Dec. 31 wage edict, like telling customers they no longer need tip servers to replacing wait staff with tablets at every table.

“It’s hard to imagine any business giving half of their labor force a 50 percent raise overnight, but that’s the reality the hospitality industry is facing at the moment,” said Fleischut. “Any further increase will just exacerbate these problems.”

American Action Forum economists Douglas Holtz-Eakin and Ben Gitis believe job losses in New York’s restaurants could be just the beginning of a boomerang nightmare of unintended consequences.

They warned the state of New York could lose as least 200,000 jobs if a statewide $15 an hour minimum wage is imposed. Other economists warn the state could see close to 600,000 people thrown out of work.

But none of those scenarios is playing into Cuomo’s thinking.

“We are making a fundamental difference in the lives of hundreds of thousands of workers across this state. I am proud to mark these milestones in the fight for fair pay,” Cuomo said Dec. 31 as the minimum wage increased to $9 an hour for tipped workers, people who serve and cook fast food, and all other industries in the state of New York.

The minimum wage for people who work in fast-food restaurants and state government in New York will go up to $15 an hour by the end of 2018. Cuomo also wants $15 an hour to be the statewide minimum wage.

“No one who works full-time should ever be condemned to a life of poverty,” he added.

Despite industry organizations pleading for mercy as the wage vise continues to squeeze their P&L statements, Cuomo made it clear in a Daily News interview that he would not back down.

He promised the minimum wage issue would be among his top legislative priorities in 2016. “The more people understand it in the state, the more they’ll support it.”

Cuomo’s fiery speech for his definition of economic justice at the SEIU rally Jan. 4 was one of the several simultaneous events held that day. It also coincided with an online petition drive calling on the New York Legislature to raise the minimum wage for everyone in New York to $15 an hour.

Mario Cuomo Campaign for Economic Justice organizers argue 3 million people, or 36 percent of New York State residents, would be able to take larger paychecks to their banks if they were making $15 an hour. And that is the best way to “get more of our friends and neighbors out of poverty and into the middle class,” according to the campaign’s website.

A Quinnipiac University poll released in September 2015 showed New York State voters support the raising the minimum wage to $15 over several years by 62-35 percent.

Maurice Carroll, assistant director of the Quinnipiac University Poll, said support for the $15 an hour minimum wage is not as broad and deep as those numbers would make it appear.

The debate is split along party and ideological lines. Liberals and Democrats love it. Conservatives and Republicans don’t.

Carroll said there is strong support for the proposal in every party, gender, age and regional group except Republicans. GOP voters oppose the idea 65-32 percent. Upstate voters are divided with 50 percent in favor and 47 percent opposed.

Support for Cuomo’s proposal is 85-13 percent among Democrats, 59-38 percent among independent voters, 77-21 percent among New York City voters and 61-36 percent among suburban voters.

Cuomo and those who are backing the campaign named after his father are going to have their work cut out for them when it comes to lobbying the Legislature.

The New York Post reported in November 2015 that the state GOP was launching an “unprecedented campaign” to block Cuomo’s proposal for a statewide $15 an hour minimum wage.

“We’re the party of Main Street and this will really hit Main Street hard,” said New York State GOP Chairman Ed Cox.

“It’s a job and business killer,” he said, “as cities around the country that have done this are starting to realize, and I think we’re going to be able to have a major impact.”