The manager of a drycleaners in Brooklyn nods toward the minimum wage poster taped right next to the front desk. “We pay all employees what we’re supposed to, $7.25 by law,” Jose Cabellan said.
The entire wall of the drycleaners is covered with Department of Labor rules and regulations, also required by law.
“But, it would be good if the employees can make more money,”” Cabellan said.
“Unfortunately for many New Yorkers, the minimum wage just isn’t adequate, it doesn’t allow them to provide for their families and make ends meet,” said New York Sen. Kirsten Gillibrand from a Bed-Stuy business Monday where she held a press event in support of federal legislation to raise the minimum wage.
Almost 90 percent of minimum wage workers are adults; more than half are women, many single mothers, and over 40 percent are minorities, according to the NYC-based workers advocacy group, United NY. Working fulltime on minimum wage earns $290 a week, or $15,080 a year, putting workers $3,000 below the poverty line.
Gillibrand announced the “Fair Minimum Wage Act,” together with Assemblyman Hakeem Jeffries and cafe owner Daicha Perkins, at Perkins’s cafe Tiny Cup, in Brooklyn.
“New York City is home to three of the nation’s top 10 areas of highest cost of living. Brooklyn is ranked second in the whole country,” Gillibrand said.
The legislation aims to increase the federal minimum wage from $7.25 to $9.80 over the next three years, indexing it to inflation—something it has never been pegged to before. The minimum wage was set to $7.25 in 2009.
“What the minimum wage is supposed to do is be the minimum a family needs to survive and get by on, and we’re supposed to index that to what it costs to index—that’s one of the problems we’ve had for so long, that it’s never been indexed to inflation,” Gillibrand said.
While states can set a higher minimum wage, Gillibrand said the process requires a lot of political support and often falls through.
Setting a higher federal minimum wage, according to the Economic Policy Institute, a think tank that supports the needs of low and middle-income workers, would boost the income of 651,000 New Yorkers and generate $618 million more in consumer spending at NYC-based businesses.
“It’s a win-win for everybody,” Jeffries said. Small businesses would be able to keep more of their employees, who often have to work multiple jobs at minimum wage.
“Better wages lead to a better economy… and stronger small-business growth,” Gillibrand said.
Perkins, who opened Tiny Cup over a year ago, has been paying her employees above minimum wage, at $8–12 hourly.
“The cost of living has increased to the point where it makes no sense for minimum wage to not increase accordingly,” Perkins said. “From a business standpoint I feel like not only will it raise morale … on top of that, I won’t have to worry about [employees] working two, three jobs to pay the rent.”
“As someone who has worked for minimum wage, it’s definitely necessary and long overdue,” Perkins said.
Perkins said that paying her employees above minimum wage has not affected her profit margins as much as people might think. A much bigger concern for small-business owners is getting a loan, according to Gillibrand.
“Getting access to capital from the bank, from the community, from lenders—it’s very difficult in this economy,” Gillibrand said. “The private sector isn’t lending where it needs to be.”
Bipartisan legislation for tax changes that benefit small businesses, such the ability to fully expense equipment purchases as a deductable in the first year (rather than over a number of years), tax deductibles for private and personal loans, and deductibles on health insurance, are all issues being discussed, Gillibrand said.
Along with raising minimum wage, Gillibrand said there is a need to reward U.S.-based manufacturers for creating more jobs that help stimulate the economy. She also suggested rebuilding infrastructure around the city as an opportunity to create more jobs.
“If we can do all those things, we create more jobs, we create economic growth, and that would make a difference for New York,” Gillibrand said.
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