MONEY

Will a $15-an-hour burger-flipper flip the economy?

The rise in pay for fast-food workers has sparked a battle over the purpose of the minimum wage.

Peter D. Kramer
pkramer@lohud.com
Anthony Ripani owns Calabria Restaurant in the Town Plaza II shopping center in Orangeburg. He said he starts his inexperienced workers, typically dishwashers, at the $8.75 minimum wage and gradually increases their pay and responsibilities.

This Labor Day, those seeking higher wages for workers have something to celebrate with the expected approval, any day now, of New York’s pathway to a $15 minimum wage for fast-food workers.

FINANCE:What's it cost to live in the Lower Hudson Valley? 

But this year’s barbecues come with a side-order of agita for business owners, who fear Gov. Andrew Cuomo’s push for the higher wage for one segment of the economy will force wages up across the board.

Anthony Ripani, owner of Calabria Restaurant on Route 303 in Orangeburg, is worried about the ripple effect.

“The percentages in this business have diminished, diminished, diminished,” Ripani said. “If they make the minimum wage $15, I’m like, ‘Where’s that gonna come from?'"

Lloyd Monaco, owner of Our Town Car Wash, said he pays his least-skilled workers $8.75 an hour plus tips, to wipe down cars after they've been through the car wash in Orangeburg.

While Ripani wouldn’t be required to pay $15 an hour — he has too few employees — he said he’ll be forced to match that wage to keep his cooks and dishwashers.

“And what do you do with the guy that’s making $15 an hour that has 10 years’ experience? What are you going to do with him?” Ripani said. “It’s going to affect everybody.”

Passing costs on to his customers isn’t a real option, Ripani said, as there’s a price point for pizza that, when eclipsed, will drive customers away.

A short way up Route 303, Lloyd Monaco at Our Town Car Wash said he knows his price point.

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“People will pay $7 for a car wash,” he said, as a steady stream of cars snaked its way through suds and blowers. “If I raise my prices, they won’t be back.”

Both merchants have been on the same stretch of Route 303 for more than 25 years. Both pay some of their staffs minimum wage — although Monaco adds tips to the $8.75 base he pays the men who wipe down cars.

National news

The minimum wage is getting maximum coverage these days.

On the presidential campaign trail, Vermont Sen. Bernie Sanders has pressed fellow Democrat Hillary Clinton to endorse the $15 minimum wage.

Social media has been ratcheting up the grass-roots effort nationwide, with rallies that send the hashtags #Fightfor15 and #15now trending.

Cuomo created the Fast Food Wage Board this spring, after the state Legislature failed to act on the wage increase.

Gov. Andrew Cuomo speaks during a July 22 rally after the New York Wage Board endorsed a proposal to set a $15 minimum wage for workers at fast-food restaurants with 30 or more locations.

On July 22, the board recommended that the state’s minimum wage — now $8.75 an hour — gradually rise to $15 over the next three years in New York City and over the next six years across the rest of the state. In the northern suburbs, the increase would phase in by a dollar a year beginning Dec. 31, until 2020 and 2021, when it would rise by 75 cents and then 50 cents.

It applies to fast-food restaurants with 30 or more locations, affecting an estimated 200,000 workers. Cuomo said that sector was targeted because fast-food workers end up going on public assistance to make ends meet, amounting to a government subsidy of an industry that decides to pay its workers less than a living wage.

Acting Labor Commissioner Mario J. Musolino is expected to approve the wage plan any day.

Critics of the move question the message the $15 minimum wage sends.

A billboard about raising the state minimum wage to $15 an hour hangs in Times Square in Manhattan.

Last week, a billboard went up in Times Square showing a young man raising one of his headphones off his ear to ask: “What? I get $30,000 a year with no experience or skills?” The copy below reads: “Who needs an education or hard work when Gov. Cuomo is raising the minimum wage to $15 an hour?”

The Employment Policies Institute — a conservative nonprofit based in Washington, D.C., and backed by restaurant groups — funded the billboard and said it will stay up for a month.

Ripani, the pizzeria owner, agrees with the billboard, saying the higher wage will entice those who might otherwise have pursued a degree.

“You’ve got people going to college spending $200,000 and they can’t even find a job!” Ripani said. “It’s a big mistake.”

Competing for labor

The debate comes as the fast-food segment is battling for workers.

McDonald’s is raising wages at its company-owned stores and paying for some college courses for employees.

Workers in a fast-food restaurant

On Wednesday, Chipotle kicks off an ambitious hiring blitz, seeking to add 4,000 workers to its payroll in one day, opening its restaurants three hours early to conduct job interviews. Videos on Chipotle’s website suggest that hourly workers (starting at $28,000 a year) can aspire to become “apprentices” (making $67,000) or “restaurateurs” (making $133,000).

In interviews with business owners in the Lower Hudson Valley, what becomes clear is that the $8.75 jobs are being filled largely by young people or by workers new to the country. There's a language barrier to be overcome for many applying for the bottom rung of the job market, they say.

That makes these employers sensitive to the immigration debate. With no prompting, they offer their solutions to the thorny issue, whether its fast-track Social Security cards or a license to work.

“In my industry, not many Americans want to do what we do,” Ripani said.

Living wage?

The rise in the minimum wage for fast-food workers has sparked a battle over the role of the minimum wage. Is it a floor, an entry point for young workers? Or should it be a living wage for a head of household?

Will flipping burgers flip the economy?

Cuomo made his case as he addressed a rally hours after the wage board issued its July 22 report.

“Franklin Delano Roosevelt started the minimum wage, and he said it is a wage that doesn’t just allow you to subsist, but to live a decent life," he said. "You cannot live and support a family on $18,000 per year in the state of New York, period. That’s why we have to raise the minimum wage.”

The National Low Income Housing Coalition tracks income and rental costs in an annual report titled Out of Reach. Its 2015 report ranked New York the nation's fourth most expensive state and Westchester the third most expensive county (behind Nassau and Suffolk).

The report calculates the hourly rate a household would need to afford a two-bedroom apartment while not paying more than 30 percent of its income on housing. It assumes a 40-hour work week, 52 weeks a year to arrive at what it calls an “hourly housing wage.”

New York’s 2015 two-bedroom housing wage is $25.67, but the index shows housing costs in the three counties in the Lower Hudson Valley well above that. Westchester’s is $30.60. Rockland and Putnam come in at $28.48.

In Rockland and Putnam, it would take 3.3 full-time minimum-wage jobs to afford a two-bedroom apartment at fair-market-rental rate of $1,481 a month.

In Westchester, the fair-market-rental two-bedroom costs $1,591, meaning it would take 3.5 full-time minimum-wage jobs to afford it. Earning one minimum-wage job, a renter, who didn’t want to pay more than 30 percent of income on housing, could afford $455.

Supporters of a $15 minimum wage for fast-food workers rally in front of a McDonald’s in Albany on July 22.

We spoke with a 28-year-old minimum-wage worker from Garnerville, a woman who asked not  to be quoted directly, but said she shares her home with four other working adults and a child.

Her job in Haverstraw, which she has held for a year, has her on her feet for four 12-hour shifts a week. She makes $8.75 for the first 40 hours and $13.12 for the last eight of her work week. She takes home $380 a week.

Home is a $1,500-a-month, three-bedroom townhouse, which she shares with her boyfriend, her cousin and her boyfriend, and her cousin's 4-year-old son, and another cousin. Utilities are $500 a month.

Three of their incomes are minimum wage. The other two are paid $11.75 an hour — $3.25 below the wage that McDonald's workers will be making before too long.

A big number

The state Labor Department reports that there are 60,584 workers making the $8.75 minimum in the Hudson Valley, encompassing Rockland, Westchester, Putnam, Dutchess, Orange and Sullivan counties. The regular $8.75 an hour minimum wage rises to $9 an hour on Dec. 31.

Minimum-wage workers are all around, from supermarket cashiers to restaurant dishwashers to the guys wiping down cars at the car wash.

Rob Ozuna, 19, of White Plains, serves a customer July 22 at Taco Bell/KFC at the Galleria mall in White Plains.

An hour after the wage board acted in July, Rob Ozuna, 19, of White Plains — on a break from his job at the Taco Bell/KFC in the White Plains Galleria — was ecstatic at the news, making a prediction that business owners have come to fear.

"That would be magnificent," he said with a laugh. "A lot of people will probably be out getting fast-food jobs."

The men wiping down cars at Our Town Car Wash in Orangeburg make $8.75 plus tips, meaning they likely take home closer to $12 an hour, Monaco said. In the winter — and Monaco has been open 26 winters — tippers are more generous.

“For me to pay a wiper $15 an hour, do you know what I’d have to charge for a car wash?” Monaco asked. “What’s going to happen is what’s happening at other car washes. They’re putting in automatic gates and more drying systems so they have no more labor.

“Fifteen is a big number,” he added.

Monaco said he was worried — but not for himself.

“I’m at the end of my tenure in this business, but I’m worried about everybody else after us; how this is going to change this part of the economy; not the poor or the rich, but the middle class," Monaco said. "You have to be middle class to live in Rockland.”