Beaming with pride at his own munificence, New York Governor Andrew Cuomo has announced that he is pushing for a statewide $15 minimum wage. This comes after Cuomo, frustrated with the legislative process, made an end-run around lawmakers’ to kick off his drive to $15.
Unable to pass a law to increase the minimum wage, he simply used a wage board to mandate an initial hike himself. That hike targets only one industry — fast food restaurants. Why? Well, because he needed to get the camel’s nose into the tent. It’s part of a plan to cram the “Fight for $15” down our throats, whether he can pass a law or not.
But what he actually told New Yorkers, in a New York Times op-ed, was that he thinks corporate CEOs at McDonald’s, Burger King and other fast-food restaurants make too much money. Cuomo argued corporate greed drives multi-million dollar salaries for the CEOs. They can afford the higher minimum wage, according to Cuomo.
Never mind that many fast food chains operate with franchises. The franchises are small businesses, owned and operated by entrepreneurs. That’s who will pay for Cuomo’s minimum wage mandate.
While Cuomo ignores how his plan would hit small businesses instead of big corporate executives, his argument was typical class warfare. He did put a new spin on it, though. Cuomo claims that taxpayers are subsidizing the fast food industry through any public assistance its workers receive from the state.
“I want to get out of the hamburger business,” he has told reporters. This is from the same governor whose enthusiasm for actual tax subsidies has New York in the film business, the video game business, the solar panel business and even dabbling in the venture capital business.
Taxpayers aren’t “subsidizing” fast food. They’re providing a safety net for the small proportion of workers who aren’t able to make enough in the job market to provide for their families. That’s very different than, say, the $5 million tax credit Cuomo gave to the “Tonight Show” in 2013.
We should remember, Cuomo’s statistics are unreliable. Cuomo’s op-ed claimed that two-thirds of fast food workers have children. According to Capital New York, Cuomo was wrong; 26 percent of fast food workers have children.
Cuomo’s staff apparently saw two statistics about the number of fast food workers with children and added them together. One said 26.6 percent of fast food workers over 16 have a child. The second statistic showed 36.4 percent of fast food works over 20 have a child.
Read that again slowly. Cuomo added those two, overlapping, numbers together to reach two-thirds. In a rush to spice up the narrative, Cuomo had some problems with his math.
Ignoring the hypocrisy and bad math for a moment, let’s consider the governor’s argument. Fast food workers aren’t making enough on the job to get by. That leaves the government to step in, because, as a society, we have an obligation to help those less fortunate than ourselves.
There’s broad support for a social safety net. Presumably, Cuomo believes this is an important societal obligation, a burden that we should all shoulder together.
But, Cuomo’s initial minimum wage hike shifts a part of that burden entirely onto the backs of small businesses in one industry. The statewide increase will also be shouldered disproportionately by small businesses. The State of New York, and society as a whole, would end its support for the proportion of fast food workers receiving public assistance. Small businesses would pick up the load.
Rather than commanding small businesses to pick up the costs of the social safety net, we should consider increasing earned income tax credits for low-income workers with families. Every taxpayer contributes to the cost of earned income tax credits, unlike a minimum wage hike, which hits small businesses hardest.
Earned income tax credits can be targeted to the people who need it the most, workers with families. It won’t go to teenagers or entry-level workers without children to support who are trying to crack into the labor force.
The way Cuomo describes it, his minimum wage hike is really just a tax on small businesses. Increasing the earned income tax credit makes more sense.
Chris Covucci is an attorney and Republican strategist in New York. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.
