Local economists weigh-in on wage debate

Fast Food Wage Debate

BUFFALO, N.Y.(WIVB)- Wednesday, dozens of local fast food workers celebrated getting one step closer to $15 an hour.

But according to Buff State Economist Bill Ganley, the Wage Board’s recommendation to raise minimum wage for fast food workers from $8.75 to $15.00 by 2021,comes at a price.

“The lower income individual who works in the industry benefits but the lower income neighborhood may lose out on the opportunity to get a Big Mac,” he said.

Ganley told News 4 that’s because large chains will become more selective with their locations, and with their hiring.

Younger workers, he said, will likely be phased out.

“Now they may say, ‘Well we really want someone who’s going to be more serious about this. Let’s hire someone who’s retired.’ So I think it’s going to work to the disadvantage of the younger worker group,” said Ganley.

He said a wage hike isn’t necessarily negative, but such a drastic one, targeting just one sector of the work force, could backfire.

He also noted that several national fast food stores are operated by local franchises, and this hike could hurt them.

“I think they were trying to avoid impacting truly small businesses,” he said.

“In that sense it sort of saves the small mom and pop restaurants, at the expense of someone who has invested money in a national brand franchise for fast food,” he told News 4.

Lawrence Southwick, a Finance Professor at UB, said the hike would force fast food chains to raise prices.

“If I’m going to pay the same at McDonald’s as I do to a mid-price restaurant, why not go to the mid-price restaurant?” he said.

While the Fight For Fifteen movement has received a lot of support locally, it’s also been criticized for some of the same reasons Southwick and Ganley mentioned.

Grant Loomis, Vice President for Government Affairs at the Buffalo Niagara Partnership, released the following statement

 “The decision to drastically hike the hourly wage for fast food workers in New York to $15 an hour will ripple well beyond the fast food industry and will do nothing but further disadvantage businesses and job opportunities in this state.

The Governor’s decision to impanel this Wage Board was an unprecedented step and established a process that was downright hostile to small business owners and employers across New York.

Instead of pushing for significantly higher wages for entry level, low-skill jobs, this state needs to focus on adopting basic reforms that will generate new opportunities in key jobs sectors and incentivizing job creation by encouraging existing businesses to stay and grow in New York.”

 

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