NEW YORK—Almost 1 million workers in New York would benefit from an increase in the minimum wage, which should increase from $7.25 to $9.00, according to a new report by the state Assembly.
President Barack Obama in his recent State of the Union speech vowed to pass a federal increase, also from $7.25 to $9.00, saying it would directly boost wages for 15 million workers nationwide, and help reduce poverty.
State officials have looked at increasing the minimum wage over the last several years, but it has yet to pass into law. Now they are aligning their plans (from an $8.75 proposal to $9.00) with the president.
“Increasing the minimum wage and linking it to inflation will help spur our local economies,” said co-sponsor Keith Wright in a statement. “The low-wage workforce in this state is disproportionately represented by women, African Americans, and Hispanics, and to these communities, an increase means worrying a little less about putting food on the table and heating their homes.”
The state version includes automatic increases to the minimum wage as cost of living increases.
“We must include a provision that indexes the minimum wage to inflation to ensure that this problem does not come back every couple years,” said Assemblyman Carl Heastie.
Gov. Andrew Cuomo supports the increase (he said on Feb. 25 in Albany that the increase will likely pass by June 1) but he and Democrats have reportedly been stymied by Republicans.
They, along with some business groups (both nationally and in the state) are opposed to the increase, saying it could cost jobs by overwhelming small-business owners, who would be forced to lay people off.
But despite Democrats saying they have enough votes to pass the minimum wage hike, the power-sharing agreement the Republicans have set up with five breakaway Democrats has prevented the hike from coming to a vote. Republican leader Dean Skelos said New York could wait for Obama’s proposal; at the same time, the governor and legislative leaders have been negotiating privately, according to the Times Union. “Skelos and other Republicans have suggested they can be brought on board if the existing proposal is coupled with tax credits for small businesses or a slower phase in of the increase,” according to the Times Union.
The increase would enable 925,000 New Yorkers to earn enough to raise a family or even enough to live individually, according to the new Assembly report. The Assembly’s Committee on Labor heard from multiple people and groups during public hearings across the state, and concluded, “One cannot live, let alone raise a family in the state of New York on $7.25 per hour, $15,000 a year.”
“No full-time worker who puts in an honest day’s work should live in poverty,” the report later states.
There are, however, other factors involved. Michael Saltsman, research director at the Employment Policies Institute, says that raising the minimum wage wouldn’t help that many people, because those who are living in poverty but work already get a boost from the Earned Income Tax Credit. Saltsman writes in an op-ed in the Wall Street Journal that 60 percent of people living below the poverty line didn’t work last year, according to the Census Bureau.
“They don’t need a raise; they need a job,” he adds. Meanwhile, many of those earning minimum wage live in households above the poverty line.
“The president can choose to expand or improve the Earned Income Tax Credit and thus have a measurable impact on poverty rates,” he writes. “Or he can hike the minimum wage. This might win him support among his labor-union allies. It won’t do any good for the low-income unemployed, and it will add to their numbers.”
State Sen. Kevin Parker disagrees with both Saltsman and advocates for the $9.00 minimum wage. He says a true minimum wage would start at $11.15 per hour, citing research by the Fiscal Policy Institute that only this amount would allow low-wage New Yorkers to regain the purchasing power available in 1970 with minimum wage work.
Further, $11.15 per hour would inject $2 billion into the national economy in new consumer spending and create over 15,000 jobs, according to Parker.
“Although many will say that this bill will hurt small businesses, it will do the exact opposite. It is the low-wage earners who return their money directly to the economy,” said Parker in a statement. ?This bill is a job creator and stimulus for our economy.”
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