Small Business

The $15 minimum wage fight just got a lot more interesting

Activists cheer after the New York Wage Board endorsed a proposal to set a $15 minimum wage for workers at fast-food chains, July 22, 2015.
Mary Altaffer | AP

The fight to raise the minimum wage to $15 an hour notched higher after New York officials recommended lifting pay for thousands of fast-food workers throughout the state. The New York Wage Board—appointed by Democratic Gov. Andrew Cuomo—will finalize a recommendation to the state's labor commissioner in the coming days.

State governors' power to influence wages without legislative action predates wage orders on government books that go back decades. As New York state and city move to formalize the mandated, minimum rate of $15 an hour over the next few years, the focus shifts to governors in a handful of states that have similar administrative authority to raise pay without legislative action.

New York state's workforce has 180,000 fast-food workers—the fourth highest in the nation.

Read More New York moves to raise fast-food wages

A key state to watch with similar power is California, led by Democratic Gov. Jerry Brown.

Advocates, meanwhile, are betting this strategy—hinged on the authority of governors—will build local momentum for a higher national minimum wage to $15 an hour from the current $7.25.

A wage board-driven strategy to lift pay "hasn't been done in recent years. This dates back to the '40s and '50s for laundry workers," said Tsedeye Gebreselassie, senior staff attorney for the National Employment Law Project. "We're going to be seeing more of this state and local policy activity."

6 years since last federal wage increase

The power of wage board laws and ultimately governors illustrate how labor advocates are working to generate local momentum for higher national pay. They're targeting occupations in a single industry, and focusing on wage battles city by city, state by state.

The thinking is to build a foundation for a higher federal minimum wage, which was last raised six years ago Friday.

Some employers including franchised businesses say the New York wage board's move will hurt small-business owners, many of whom are women and minorities. And looking out, some prior precedent suggests legal action might not be an option for regional employers, hoping to push back against the Cuomo administration.

"In numerous cases from the 1940s through just last year, New York's courts have consistently upheld Labor Department wage orders and rejected employer attempts to challenge them in court," according to NELP analysis.

The state of the American worker—including wage growth—is front and center heading into the 2016 presidential race. In recent days, Republican Jeb Bush and Democrat Hillary Clinton, both front-runners, have highlighted the U.S. economy and the growth of contract workers. More Americans are piecing together a patchwork existence on lower paying and short-term assignments, which don't have the traditional safety net of health care or retirement benefits.

Wages are a big part of the unfolding election. And a key question remains: Which governor might move next and push to lift wages using their administrative power?

Fast food wages rising
Fast food wages rising

States to watch

Governors in a few states have authority to raise wages on their own without state action, according to NELP. In addition to New York and California, two other states have similar power and are led by Republican governors: Charlie Baker of Massachusetts and Chris Christie of New Jersey.

States with administrative wage authority—and their current statewide, minimum wages per hour—are:

  • New York at $8.75
  • California at $9
  • Massachusetts at $9
  • New Jersey at $8.38

Republican Gov. Scott Walker of Wisconsin recently repealed some of his state's wage rules.

Additionally, some cities have moved independently to lift wages above regional and federal levels including Los Angeles and Seattle.

Read MoreJeb Bush, Uber and the new American contract worker

CORRECTION: This version corrects Wisconsin's wage authority that was repealed as part of the state budget the governor signed earlier this month.