Gov. Andrew Cuomo’s list of ‘Fight for $15’ businesses doesn’t tell the whole story

Gov. Andrew Cuomo’s list of ‘Fight for $15’ businesses doesn’t tell the whole story

New York Democratic Gov. Andrew Cuomo released a list of 85 companies Wednesday that support his $15 minimum wage proposal, but some are expressing doubt that the list is an accurate reflection of the position of state businesses.

Cuomo announced his proposal in September to increase the statewide minimum wage to $15 an hour and has since put the policy at the forefront of his agenda.

The list is supposed to demonstrate support for his proposal, but National Restaurant Association spokeswoman Christin Fernandez argues that the list lacks those companies that will be most impacted by the increase like small businesses.

“I find it interesting that they’ve listed venture capitalists and corporations that have no problem absorbing the cost of a $15 wage increase,” Fernandez told The Daily Caller News Foundation, adding:

Maybe Governor Cuomo should talk to the business owners that will really be impacted by his proposal before they put out press releases touting support.

New York currently has a minimum wage of $9 an hour. Minimum wage increases don’t impact all businesses that same way, and those with low-profit margins will often have more trouble overcoming the increase. The policy has the potential to hurt the poor by forcing businesses to cut back on their workforce or increase prices to overcome the added cost of labor.

“In the restaurant industry, over 90 percent of restaurants are small business,” Fernandez continued:

Just because a restaurant flies under the banner of a larger brand does not mean it is corporate owned. It could be a franchisee that has put a huge stake into owning and operating only one or two stores. Profit margins in our industry are slim.

Small businesses that participate in the franchise model were among those not included on the list. A franchise is a unique business model because each one consists of many small companies. Corporations allow small businesses to use their brand name and sell their products. Cuomo apparently overlooked the very basis of the model when he enacted his policy unilaterally for fast-food owners.

“Cuomo asked for a wage board to be convened and that’s where the findings came from,” International Franchise Association State Government Relations Director Jeff Hanscom told TheDCNF. “It singled them out as a big business when of course they’re not.”

The Fast Food Wage Board was formed May 20 to study and make policy recommendations. It also gives Cuomo the ability to unilaterally enact the policy by treating the small businesses in the franchise model like the large corporations they contract with. Hanscom works with franchises across the state but notes he is unaware of Cuomo even trying to reach out to them.

“The Governor unfairly targeted a subset of single industry with his original proposal,” Fernandez also noted. “While the restaurant industry is a highly competitive one for sure, the competition should be fair with everyone on an equal playing field and it’s hard to focus on growing your business when you’re dealing with mandates that do anything but.”

The governor can’t convene a board to institute a statewide increase, unlike industry specific increases. He will need legislative approval for his policy, but he is likely to face opposition in the state Senate which has a Republican majority. Cuomo has also unilaterally raised wages for state university workers and state employees.

The nonpartisan Congressional Budget Office has found both positive and negative results when it investigated minimum wage increases in the past. Research found any increase of the minimum wage will likely result in at least some job loss — the higher the increase, the more impact it will have on employment.

Cuomo has also proposed and implemented a number of tax cuts to help relieve costs for small businesses in the state.

His office did not respond to a request for comment by TheDCNF.

This report, by Connor D. Wolf, was cross-posted by arrangement with the Daily Caller News Foundation.

LU Staff

LU Staff

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