(WKBW release) Calling it a matter of dignity and crucial to the ability of working men and women to climb the economic ladder, Assembly Speaker Sheldon Silver and Assembly Labor Committee Chairman Keith Wright on Monday introduced legislation to raise the minimum wage in New York to $8.50 an hour and index it to inflation to ensure wages don't erode in the future.
"Last year we began the process to instill fairness in New York's tax code, and now we are addressing the inequities at the lower end of the pay scale," Silver said in a news release. "It is absurd to expect anyone to afford the cost of living today and be able to invest in their future on a pay rate of $7.25 an hour. That is why it is my top priority this legislative session to repair the ladder to success, to make an investment in our working families and ensure that they can continue to do so as the cost of living continues to rise."
The legislation (A.9148) calls for the minimum wage to increase to $8.50 in January of 2013. The minimum wage will be indexed, requiring an increase each year to adjust for inflation according to the Consumer Price Index (CPI). Indexing will begin January of 2014.
The legislation will also set wages for food service workers who receive tips at $5.86. This wage will also be indexed annually to adjust for inflation.
"Raising the minimum wage and indexing it to inflation is a matter of economic fairness, and our plan progressively rewards hardworking men and women who are trying to make ends meet," Wright said in the news release. "According to the US Census, nearly half of all Americans have fallen into poverty or joined the ranks of the working poor. This is not the American Dream. New Yorker's who work full time, shouldn't be poor. It's as simple as that!"
The minimum wage in New York has increased only ten cents in the last six years. It was raised with the federal minimum wage to $7.25 an hour in 2009. Prior to that, the minimum wage was $7.15, which was set in 2007.
The District of Columbia, Massachusetts, Connecticut, Vermont and 15 other states have higher minimum wage rates than New York State.
Ten other states have passed legislation indexing the minimum wage to ensure the minimum wage will not erode each year as the cost of living rises
“I want to thank Speaker Silver, Assemblyman Wright, and their colleagues for their leadership on this critical issue,” said Mario Cilento, president of the NYS AFL-CIO. “Increasing the state minimum wage and indexing it to inflation is smart policy. It will benefit both workers and our state economy, as this money will be spent right back in our local communities. This bill will ensure that never again is the buying power of the minimum wage ravaged by inflation. Workers and their employers will have modest and predictable annual increases to plan for. With this bill, we have the opportunity to make a real positive change in people’s lives.”
"A broad coalition of labor unions, community organizations, and the Working Families Party is supporting the Assembly to raise the minimum wage this year. This legislation is a small but important step that will help forge a path out of poverty toward the middle class," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union (RWDSU) of this effort. "New Yorkers need a wage-led recovery from the recession. It's time to transform economic vulnerability into economic security. This legislation tells low-wage New Yorkers that they are not invisible or forgotten, and that government can improve their lives."
Two of New York’s leading business organizations expressed dismay Monday, at the prospect of New York adopting an increased minimum wage law that would put its members at a distinct competitive disadvantage.
Despite repeated studies that demonstrate that minimum wage increases do nothing to decrease poverty or increase employment, the bill introduced today by Speaker Silver seeks to increase New York’s minimum wage from $7.25 to $8.50 an hour.
“When the government imposes costs on a business that the market does not dictate, we typically call this a tax,” Dean Norton, President of New York Farm Bureau said in a joint news release issued by the Farm Bureau of New York and The Business Council of New York State. “Today’s proposal to increase New York’s minimum wage is a stealth tax for our State’s farmers masquerading as a benefit for workers. In reality, this proposal will hurt the very people that it aims to help, by artificially increasing payroll and forcing farmers to make tough decisions about the size of their workforce and the price of their products.
“At a time when we are working hard to create jobs and improve our business environment, this proposal seems particularly ill-timed and ill-considered."
“The Business Council believes that the way to improve our state's economy and the lives of all New Yorkers is to create more private-sector jobs. Raising the minimum wage would only hurt New York's small businesses, farms and not-for-profits that are struggling to make their current payrolls, and reduce job opportunities, in this difficult economy," Heather Briccetti, President and CEO of the Business Council of New York State, Inc. said in a news release.
Advocates for a higher minimum wage often site evidence that shows that boosting the minimum wage will increase the paychecks of the lowest paid workers and help them out of poverty. Twenty-eight states accepted this logic after the Federal minimum wage was increased in 2003 and 2007. But studies−such as the one published last year by the Southern Economic Journal− found no evidence that state minimum wage increases made any real difference.
In another news release, Unshackle Upstate blasted the proposal in a statement.
The statement reads:
“The minimum wage proposal put forth by Assembly Speaker Sheldon Silver is ill-timed and shows a complete disregard for the private sector and the challenges Upstate New York faces in promoting private sector job creation.
It is well documented that higher labor costs reduce employment, especially among young and low skilled workers. Thankfully, Gov. Cuomo and many legislators have advocated for policies and initiatives that provide greater employment opportunities for those individuals. In addition, raising the minimum wage will increase the costs for goods and service purchased by taxpayers, making it more difficult to make ends meet.
If the members of the Legislature are truly committed to promoting private sector job growth and unlocking New York’s economic potential, they should reject this proposal and instead focus on enacting reforms that will improve Upstate New York’s business climate. We need to reduce the regulatory burden on businesses, not add to it.”