NYS Minimum Wage Coalition Welcomes Reported Agreement to Raise New York’s Minimum WageFor Immediate Release: March 18, 2013
Contact: Danny Massey, firstname.lastname@example.org, (646) 200-5323
With the reported increase, New York joins 19 other states that have raised their minimum wages above the current federal level of $7.25 per hour. The reported package reflected demands by Senate negotiators to slow down the pace of the increase and drop the future cost-of-living increases that the state Assembly approved two weeks ago. However, the agreement rejected loopholes for younger workers and tipped workers that Senate negotiators had been pushing.
“Speaker Silver and Governor Cuomo deserve tremendous credit for brokering this long overdue raise. It will mean less hardship for more than 1.5 million working New Yorkers, and begins the process of restoring the lost value of the state minimum wage,” said Paul Sonn, Legal Co-Director of the National Employment Law Project. “But the weaker package that the Senate demanded means New York’s neediest workers are receiving a $1.2 billion smaller raise than they would have.”
According to the Economic Policy Institute, raising New York's minimum wage to $9.00 per hour will benefit over 1.5 million New York workers — more than one in five workers in New York . The Fiscal Policy Institute estimates that increasing New York’s minimum wage to $9.00 per hour will generate more than $1.1 billion in new economic activity, supporting the creation of 10,200 new full-time jobs as businesses expand to meet increased consumer demand.
Advocates had been pushing New York to provide for automatic annual increases to the state’s minimum wage in future years to keep pace with the rising cost of living, a key reform known as “indexing” that 10 states have already successfully implemented, and that was contained in the minimum wage increase passed by the State Assembly last week. However, Senate Republicans and the Independent Democratic Caucus insisted on dropping indexing, and delaying the increase to $9.00 until 2016. Under the reported agreement, New York’s minimum wage will increase to $8.00 in 2014, $8.75 in 2015, and $9.00 in $2016. New York’s tipped wage for food service workers will continue to be 69% of the full minimum wage, meaning that it will increase to $6.21 by 2016.
“Today, New York State takes an important step towards becoming a place where hard work leads to economic opportunity, not to poverty,” said Andrew Friedman, Executive Director of the Center for Popular Democracy.
"Raising the minimum wage not only helps 1.5 million low-wage New York workers, it also supports the creation of 10,000 badly-needed jobs throughout the state, providing a much-needed economic boost," said James Parrott, chief economist at the Fiscal Policy Institute.
When New York’s minimum wage increases to $8.00 on January 1, it will still be behind Washington State ($9.19), Oregon ($8.95), and Vermont ($8.60), all three of whose minimum wages are expected to increase on January 1st because these states are among the ten that “index” the minimum wage to adjust with inflation. Connecticut, Illinois and Nevada’s minimum wages are close behind at $8.25. Bills to increase the minimum wage are pending in about a dozen states, including Massachusetts ($11.00), Illinois ($10.00), Maryland ($10.00), and Connecticut ($9.75).
New York’s minimum wage boost also comes one month after Congress introduced the Fair Minimum Wage Act of 2013, which would raise the federal minimum wage from $7.25 to $10.10 by 2015 and index it to inflation. Nearly 140 House of Representative members and 28 Senators have already signed onto this legislation as co-sponsors. [See NELP fact sheet for key background and bill information].
Raising New York’s minimum wage also won support from leading business voices across the state, including New York City Mayor Michael Bloomberg and Crain's New York Business – which editorialized strongly in support of raising the minimum wage, and pointed out that past predictions of slower growth or jobs moving across state lines in response to raising the minimum wage did not materialize. Hundreds of individual businesses and trade associations such as Costco, ABC Home, and the Greater New York Chamber of Commerce, also supported raising New York’s minimum wage.
New York’s minimum wage increase also comes at a time when the core of the U.S. economy is steadily shifting toward low-wage work. A recent report by the National Employment Law Project found that 58 percent of all jobs created in the post-recession recovery have been low-wage occupations. The growth of low-wage jobs in the U.S. has proceeded even as America’s workers have obtained better education and more skills: According to a report by the Center for Economic and Policy Research, while the share of Americans with college degrees nearly doubled over the past 30 years, the share of middle-class jobs in the U.S. actually shrunk by 2.8 percent.
The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high. Last month, leading economists surveyed by the University of Chicago agreed by a 3-to-1 margin that the benefits of raising and indexing the minimum wage outweigh the costs. A new study by the Center for Economic and Policy Research reviews the past two decades of research on the impact of minimum wage increases on employment and concludes that “the weight of the evidence points to little or no effect of minimum wage increases on job growth.”