Continuing to push for higher wages for the state’s lowest-paid workers, Gov. Andrew M. Cuomo announced on Tuesday that all of the waiters, waitresses and others who work for tips in New York City will soon get a raise of their minimum wage to $7.50 an hour.
The increase was ordered by the acting labor commissioner, Mario J. Musolino, and will go into effect at the end of the year. It will consolidate three categories of tipped workers — whose minimum hourly wages range from $4.90 to $5.65 — into a single class to be paid at least $7.50 an hour.
The governor appeared with labor leaders at a union hall in Manhattan to celebrate Mr. Musolino’s decision and to repeat his own call for an increase in the statewide minimum wage for nontipped workers to $10.50 an hour. Mr. Cuomo also restated his view that the general minimum wage in the city should be even higher, $11.50 an hour, because of the higher cost of living.
The statewide minimum is scheduled to rise to $9, from $8.75, at the end of the year. But Mr. Cuomo said that increase, which translates to about $18,000 a year before taxes, was insufficient.
“You cannot raise a family, pay for rent and food and insurance and health care on $18,000 a year in the city of New York,” Mr. Cuomo, a Democrat, said from a stage at the home base of the New York HOTEL AND MOTEL Trades Council. He said the original concept of the minimum wage was that it be enough to support a family with dignity, but he added, “If it’s $18,000 in New York City today, you can’t get there.”
The city’s mayor, Bill de Blasio, would agree with Mr. Cuomo, to a point. Mayor de Blasio, a Democrat, has sought approval from the State Legislature to raise the minimum wage in the city even higher, first to $13 an hour and eventually to $15. But Mr. Cuomo has called that proposal a “nonstarter.”
What is more certain is that tipped workers — more than 250,000 statewide — will receive the first increase in their minimum wage since 2011. That news cheered Ondre Anderson, who said he worked as a waiter at a “casual fine dining” restaurant in the Flatiron district of Manhattan.
“When you’re working for $5 an hour, that’s basically just food money for the month,” said Mr. Anderson, 33, who added that he hoped to earn enough to move from a homeless shelter in Queens into an apartment. “We never know where our tips are coming from. Some people tip and some people don’t.”
Mr. Anderson said he figured he would earn about $75 more a week after the increase. “Every little bit does help,” he said.
But the restaurant industry criticized the wage increase as too big and counterproductive.
“The crazy part about this is you’re literally increasing payroll for restaurant groups by 50 percent,” said Chris Hickey, regional director for the New York Restaurant Association. “It’s going to hit small businesses the hardest.”
Restaurant owners will not be able to absorb the cost increase or pass all of it along to their customers in the form of price increases, Mr. Hickey said. That inevitably will lead them to trim their payrolls by eliminating as much as one-fifth of their tipped workers, including waiters, waitresses and bartenders, he said.
Mr. Hickey said that restaurants were “at an impasse at this point” and that many of them might decide to abandon the tradition of having servers rely on tips from customers for much, if not most, of their pay. As an example, he cited Dirt Candy, a vegetarian restaurant that opened three weeks ago on the Lower East Side of Manhattan with a no-tipping policy.
Amanda Cohen, the chef who opened Dirt Candy, said she paid her employees at least $15 an hour and added an “administrative fee” of 20 percent onto each check to cover the higher wages. More restaurants are likely to follow her lead now that the wage increase is imminent, she predicted.
“I can’t imagine it won’t change the way restaurants operate,” Ms. Cohen said. “They’re going to have to raise their prices or go to a new tipping model. My guess is that restaurants are going to have to raise their prices and be honest about it and say this is what it costs to operate this business.”
In his remarks to the union workers and their leaders, Mr. Cuomo expressed little sympathy for business owners’ complaints about having to pay higher wages.
“We want business to do well so that then these leaders can sit down with business and say, ‘We want our fair share of what’s going on,’ ” the governor said, adding that the state’s economy had been producing jobs at a fast rate. “So when they sit down with the leaders of business, the leaders of business cannot say, ‘I’m broke.’ They’re doing great, and we know they’re doing great.”