Democratic frontrunner Hillary Clinton earned high praise from big labor after endorsing New York’s new $15 wage that threatens to close hundreds of small businesses.
Clinton endorsed on Friday the decision from Democratic Gov. Mario Cuomo’s three-member panel to hike starting wages at all fast food establishments from the statewide minimum of $8.25 per hour to $15 an hour, a 70 percent increase.
"The national minimum wage needs to be raised. The cost of living in Manhattan is different than Little Rock and many other places. New York or Los Angeles or Seattle are right to go higher," Clinton said at a campaign event touting Wall Street reforms on Friday.
The former secretary of state had previously praised the efforts of the Service Employees International Union (SEIU), a major Democratic donor that spent $20 million in 2014 on front groups protesting for $15 wages at McDonalds. Until Friday she had not explicitly endorsed the $15 minimum wage.
Her endorsement drew criticism from labor watchdogs. Ashley Pratte, senior adviser for Worker Center Watch, said workers could end up being the biggest losers.
"Governor Cuomo, by executive fiat, just set the precedent that if you spend millions of dollars organizing made-for-TV protests then he’ll reward you with a whooping wage hike," Pratte said. "Unfortunately for the SEIU, the new $15 dollar-an-hour new dues-paying members that they so desperately seek will probably end up being replaced by self-ordering kiosks."
Surveys of local businesses have pointed toward job losses, hiring freezes, and higher prices as owners struggle to pay wages that are more than twice as high as the $7.25 federal minimum. The Employment Policies Institute, a free market think tank, surveyed nearly 1,000 franchise operations in the state in the weeks leading up to the wage board’s recommendation and found that about 20 percent of them would "very likely" shut down with the massive wage hike.
"You can have a $30,000 fast food minimum wage, or you can have a robust market for entry-level jobs. You can't have both. Reasonable people understand this. But Gov. Andrew Cuomo and Hillary Clinton are not reasonable people," EPI research director Michael Saltsman said. "Instead of making good on his supposed commitment to small business, they’ve ensured that small franchisees and the people they employ will pick up the tab for a political gift to the SEIU. It might be shrewd politics, but it's terrible economics."
Clinton’s newfound support for the massive wage hike won plaudits from major labor groups.
"Today, Hillary Clinton endorsed Governor Andrew Cuomo’s move to raise the minimum wage for fast-food workers in New York State to $15 an hour putting the topic of low income wages on the national stage," state AFL-CIO president Mario Cilento said in a statement. "This is just the beginning. The Labor Movement remains committed to ensuring the wage increase for fast-food workers sets the stage for all other low wage workers moving forward."
Clinton has been tacking to the left in recent months to head off the insurgent campaign of socialist Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley, both of whom had already endorsed the wage rate. Her support for the minimum wage hike drew applause from more liberal elements of the Democratic coalition.
"We look forward to the Clinton campaign's big speech on systemic reforms, and the American public will look to see if she is willing to challenge Wall Street power," Adam Green, co-founder of the Progressive Change Campaign Committee, said in a statement.