In leagues with SEIU union bosses, New York’s Governor Andrew Cuomo has mandated wages for the state’s fast-food workers to go to $15 and is now pushing for an minimum wage increase across all sectors in his state.
To be sure, it is an experiment that no one, including pro-union supporters, knows what the consequences will be.
In response to the mandates, Melissa Fleischut, president and CEO of the New York State Restaurant Association, has been lobbying Cuomo—to no avail— for a reprieve.
“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.
With state and federal elections later this year, the rhetoric over increasing the minimum wage at state and federal levels will only increase.
However, once the elections are over, all that will be left will be to figure out whether the experiment in government-mandated is just the beginning or the beginning of the end?