Millions could be affected by minimum wage hike

Posted at 12:22 PM, Sep 28, 2015

Even with minimum wage increases cropping up around the nation, Gov. Andrew Cuomo's $15-an-hour proposal stands out for directing so much more money to so many workers.

Cuomo wants to phase in a minimum wage jump from the current $8.75 to $15 in a state with roughly 8 million workers receiving wages or salary. This would come on top of the $15 minimum wage the governor has already secured for New York's fast food workers.

Cuomo engineered the fast food raises though administrative actions. But for a broader $15 minimum wage, he plans to introduce a bill in the state Legislature, where Republicans in control of the state Senate have already raised objections.

Cuomo has heated up a long-running debate on the need of low-paid workers to earn a living wage versus dangers of placing potentially job-imperiling financial burdens on business.

Here's a look at some numbers behind the arguments.


There are close to 3 million workers in New York state now making under $15 an hour who could benefit from the governor's new proposal, according to the Fiscal Policy Institute, an estimate higher than one from the administration. The labor-backed group said more than nine in ten of those workers are at least 20 years old.

Hairdressers, housekeepers, office clerks, tellers, technicians, pharmacy aides, and nursing assistants could all get raises under the $15 proposal. They would join an estimated 200,000 fast-food workers in restaurants with 30 or more locations already on track for a $15 wage.

The fast-food raise will take full effect by Dec. 31, 2018, in New York City and by July 1, 2021, for the rest of the state. Cuomo would use the same timeline for a broader raise.



Cuomo is far from the only Democrat to champion minimum wage increases in a time of growing concerns over income inequality.

New York was one of 29 states that had a minimum wage higher than the federal rate of $7.25 at the start of this year. (New York's floor of $8.75 will rise to $9 at the end of the year).

But the push for a wage floor as high as $15 is relatively new. It has been pioneered in liberal-minded cities such as Seattle, Los Angeles and San Francisco, which all are phasing in the higher wage over multiple years.

Looking at other states, there is a labor-backed effort to bring a $15 minimum wage ballot proposal next year to California and there is a campaign for a similar 2016 ballot proposal in Oregon.

With the cities just beginning to phase in wages that will almost double the federal minimum, it's too early to measure effects on working families and businesses. Seattle officials ordered an independent study when they approved the phase-in.


A full-time worker in New York making minimum wage now can gross $18,000 a year. That's not enough to support a family, Cuomo argues, sketching out "typical" costs of $11,000 for housing, $9,000 for food and $6,000 for clothing.

A $15 minimum wage equates to roughly $31,000 a year — or a raise of roughly $13,000 a year.

That extra money, of course, would come from employers. The difference between $9 and $15 an hour to employers is $13,950 per full-time worker, once payroll-related costs like Social Security are included, according to the Business Council of New York State. The group argues that the costs can add up quickly, especially for smaller employers.



Do all low-paid workers in New York need such a substantial raise?

The governor argues that no single neighborhood in New York City is affordable to a minimum wage earner. Critics counter that it can cost far less to live in upstate New York.

For instance, the median rent of $1,315 in Queens is more than twice that of upstate cities like Utica and Olean, according to Census figures.

Likewise, wages tend to be lower in those upstate areas. E.J. McMahon of the fiscally conservative Empire Center wrote on his blog recently that median hourly wage of all full- and part-time jobs as of May 2014 ranged from $15.30 in the Glens Falls area to $21.73 in the New York City metro area.

The counter argument is that wages have been lagging for so long that correction is overdue.

The Fiscal Policy Institute said that by the time the $15 floor would be phased in across upstate areas in 2021, a single worker in Buffalo or Rochester will need more than $15 an hour to meet basic living costs, once inflation is taken into account.




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