New York turns the minimum wage debate on its head

Employees of McDonald’s (MCD), Wendy's (WEN) and other fast-food restaurants in New York are celebrating today. A special commission appointed by Governor Andrew Cuomo is recommending increasing the minimum wage for them to $15 an hour. The panel is calling for a gradual rise, with the first hike coming sometime before the end of this year. The current minimum wage is $8.75 an hour.

Yahoo Finance Senior Columnist Michael Santoli isn’t surprised this is the industry getting the focus considering the many minimum wage protests outside of fast-food restaurants recently.

“Obviously, that’s where the main publicity push has come in this movement,” he says. “It seems for whatever reason this has become where the battle is being fought.”

Santoli also points out restaurant chains are a good target since it's hard for them to pack up and go in order to avoid paying employees more.

“Fast-food stores, they can’t be exported to Mexico,” he notes. “These jobs are going to have to be here if these businesses remain here.”

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The New York State Restaurant Association is blasting the move, calling it biased and a job killer.

“From day one Governor Cuomo’s wage board has sought to silence the business community and force through an unfair and discriminatory increase on a single sector of one industry…the result is an extremist policy that will force business owners in this low profit margin industry to cut hours, lay off employees and use technology to help offset skyrocketing labor costs.”

But Santoli thinks Cuomo will brush off the criticism.

“It’s really an activist state government right now, they really want to throw regulations around and reshape the economy here,” he says. “Cuomo likes to be a beacon for domestic policy measures.”

And he feels this ruling might be a first step to expanding the $15 an hour minimum wage to lower-paid workers in other industries as well.

“This was a measure that was taken because a broader effort was not looking likely,” he explains. “So maybe they feel it’s planting a flag and saying we think this ought to happen. And also they can impose this through these labor regulations, so maybe it’s that wedge that’s going to get that done.”

Santoli notes that if the economy keeps improving, the higher minimum wage debate might just become moot.

“This whole thing is happening at a time when the labor market itself is hopefully going to start pushing wages up,” he explains. “So maybe it’s going to seem a little less like a quantum leap in minimum wage when we get the general wage just lifting on its own cyclically.”

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