A $15 Minimum Wage for New York City Food Service Workers

As Americans have grown increasingly concerned about economic inequality and stagnant wages, a national consensus has formed that the minimum wage must be raised. However, with partisan divisions in Washington immobilizing the federal minimum wage at $7.25/hour since 2009, the focus has shifted to what states and municipalities can do to address the minimum wage.

In recent years, many states have raised their minimum wages above the federal minimum and a number of cities and counties have raised their legal minimum wages above their respective state minimums. Seattle, San Francisco, and Los Angeles have all voted to increase their minimum wage to $15/hour or more, and Kansas City and St. Louis, among others, are considering similar proposals.

In April, the Comptroller’s Office released an economic brief: “Income Analysis of a $15.00 Minimum Wage in New York City” on the income effects of phasing in a $15 minimum wage for low-wage workers in New York City between 2017 and 2019. The report estimated some of the effects of the higher wage on spending, income distribution and housing expenditures and pointed out how it could mitigate student debt.

The Comptroller’s Office brief showed how a $15.00 minimum wage, would raise NYC workers’ wages by $10.2 billion in 2019 when fully phased in–benefiting 1.46 million people that year.

This brief provides a similar analysis for those in one of the largest sector of low-wage employment — food service workers.

Food service workers are in the forefront of the discussion about the inadequacy of minimum wage laws. Over 11 million Americans work in the food service sector and employment in the sector has grown by 2 percent annually over the past 15 years. Yet, they are among the lowest-paid workers in the economy; the average weekly wages of food service workers are only 35 percent of the overall private sector average. Moreover, food service employees often work irregular hours that are highly disruptive to family life.

Employment in New York City’s food service sector has grown even more rapidly; in fact, its growth in recent years has been remarkable. Over the past 15 years, food service employment in the City has grown at a 3.9 percent annual rate, but over the past five years the rate of growth has accelerated to nearly 7 percent annually. In April 2015, there were over 280,000 people employed in the City’s food service sector.

Since the turn of the century, employment in the City’s limited-service food establishments—generally those that are regarded as fast-food restaurants—has grown most rapidly. Employment in limited-service establishments increased by over 40,000 between 2000 and 2014, and as of 2013 (the last year for which data is available), there were over 7,600 fast food restaurants in the five boroughs. Employment in full-service restaurants, in which the majority of food service jobs are still located, also expanded rapidly, by over 64,000. Table 1 shows the growth in the City’s food service employment through 2014, by type of food service establishment.