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New York plans US$15 minimum wage at fast-food chains

New York State governor Andrew Cuomo (centre) raises arms with Mary Kay Henry, president of labor union SEIU, to celebrate the passage of the minimum wage for fast-food workers by the New York State Fast Food Wage Board in New York on July 22, 2015.

[NEW YORK] New York state was poised on Wednesday to raise the minimum wage to US$15 in the fast-food sector, a key victory in a long-running workers campaign for liveable wages.

A three-person panel appointed by New York Governor Andrew Cuomo said the state's current minimum wage of US$8.75 an hour should be increased to US$15, a raise of more than 71 per cent.

Mr Cuomo had indicated he would follow the panel's recommendation.

"What a great, great day!" Mr Cuomo, a Democrat, said at a news conference with the leaders of the US$15 campaign.

The wage increase will be phased in, starting with fast-food chain restaurants operating in New York City. They are due to meet the new minimum wage by 2018, while elsewhere in the state fast-food restaurants will have until 2021 to comply.

The federal minimum wage is US$7.25 an hour, but states and municipalities cna set their own. Some 29 states and Washington, DC, have minimum wages above the federal minimum.

"We're getting US$15 before every other state," said Eric Schneiderman, New York attorney general.

"It's a victory you have all built," he said, thanking the labour leaders and Mr Cuomo. "This is a victory for all men and women who work hard."

Activists have been pushing for several years to get the US$15 minimum wage in the fast-food sector, notorious for low pay that workers say does not keep them out of poverty.

Under pressure from unions, McDonald's announced in April a pay hike for 90,000 employees in company-owned restaurants, though that does not affect the majority of its restaurants, which are owned by franchisees.

From July 1 the starting wages for full and part-time workers in its own restaurants were raised by one dollar above the local minimum wage.

The move followed similar wage increases announced by Wal-Mart Stores, Gap and others, all under pressure from labour and social groups over low pay.

Cuomo said that New York state's US$15 minimum wage decision would "radiate" across the country.

"If it's right in New York, it's right in California," he said.

In May, Los Angeles, the second biggest US city, passed an increase in its minimum wage from US$9 to US$15 an hour by 2020. That followed a similar move by Seattle one year ago.

Other states and communities have also passed, or are weighing increases to, statutory minimum pay, after years in which inflation eroded the spending power of US workers.

But only a few have moved toward the US$15 target that worker groups are calling for.

According to US labour data, workers in the food preparation and serving-related occupations comprise 22 per cent of US employees who make at or below the minimum wage. Workers such as waiters can earn less than the minimum wage if they make up the gap in tips.