Letter to NY Editors

From the National Employment Law Project
In the coming weeks, Albany insiders expect the New York Senate and Assembly to hold a special legislative session, during which they will vote to raise their own salaries from the current $79,500 to over $100,000 per year. This anticipated pay hike – which would make New York's the highest paid state legislature in the nation – comes even as the leadership of the state Senate has balked at approving a modest $1.25 per hour increase in the state minimum wage. With growing numbers of New Yorkers relying on low-wage jobs to make ends meet, it is irresponsible for elected officials in Albany to raise their own salaries without boosting pay for the lowest-paid workers in the state. Governor Andrew Cuomo has announced that he “would not consider a legislative pay raise . . . [until] the people’s business was being done in a thorough, responsible way,” singling out the minimum wage increase and his drug reform initiative as key issues remaining to be addressed.

Governor Cuomo should be commended for taking this hard line. The legislature would reward itself with a pay raise of up to $20,000 per year –– significantly more than the $15,080 that a full-time minimum wage worker earns in an entire year.  The idea that some legislators would try to increase their hourly earnings from roughly $45 per hour to $55 per hour, while refusing a modest $1.25 per hour raise for more than one million low-wage New Yorkers whose paychecks have been flat or falling, is simply wrong and will further erode the public’s trust in Albany lawmakers.

At $7.25 per hour, New York’s minimum wage remains decades out of date. If New York’s minimum wage had kept pace with the rising cost of living over the past 40 years, it would be approximately $10.70 per hour today. Eighteen states have already established higher minimum wages than New York, including the nearby states of Connecticut, Massachusetts, and Vermont.

Contrary to myth, the minimum wage is chiefly about large corporations, not mom and pop businesses:  66 percent of low-wage workers across the United States are employed by large corporations like McDonald’s, Walmart and Yum! Brands, not small businesses. Furthermore, more than 70 percent of the biggest low-wage employers have already recovered from the recession and are enjoying strong profits – even as wages remain stagnant for their frontline employees. In retail, New York’s largest low-wage industry with 269,000 employees, the data show that large chains are paying 23 percent less to their workers than smaller retailers, according to an analysis by the Fiscal Policy Institute.
In May, the state Assembly voted 98-49 to approve a proposal sponsored by Speaker Sheldon Silver that would raise New York’s minimum wage from $7.25 to $8.50 per hour and index it to automatically adjust each year with the rising cost of living. The Assembly proposal was blocked in the Senate, however, as Senate President Dean Skelos refused to schedule a vote before the legislative session concluded for the summer.

The New York state legislature cannot in good conscience grant itself a pay raise while more than a million New Yorkers continue earning poverty-level wages. Please join the National Employment Law Project in urging the New York state legislature to raise the minimum wage to $8.50 per hour and index it to adjust each year so that it keeps pace with the cost of living. 

The time is right for action on the minimum wage:

  1. More New Yorkers than ever are relying on low wage jobs, which is where growth has been concentrated since the recession. A report released in August by the Fiscal Policy Institute shows that New York has gained a net 194,000 low-wage jobs since June 2008, while losing a net 144,000 middle-wage jobs and losing a net 29,000 high-wage jobs. More than 84 percent of workers that would benefit from the proposed increase are adults over the age of 20. Many support families on this income, but the current minimum wage in New York amounts to just over $15,000 per year for a full-time worker. County-by-county data on the impact on local paychecks of raising the minimum wage to $8.50 is available here.
  2. Public support for raising New York’s minimum wage has only grown in recent months. An overwhelming 80 percent of New Yorkers support raising the state’s minimum wage to $8.50 per hour, according to an August poll by Siena College.
  3. The boost in wages would go directly back into the state’s economy as low-paid workers spend their paychecks on necessities at local businesses. The Economic Policy Institute estimates that raising New York’s minimum wage to $8.50 per hour would generate more than $600 million in new consumer spending, translating to 5,230 new full-time jobs as higher sales lead businesses to hire more employees. More than 1 million low-paid workers in New York would see their wages rise as a result of this increase.
  4. A record number of voices from the business community have backed the increase. While some business lobbyists will always oppose any action on the minimum wage, the current proposal to raise New York’s minimum wage has won support from more leading business voices than ever across the state. These include New York City Mayor Michael Bloomberg and Crain's New York Business – which editorialized strongly in support of raising the minimum wage to $8.50, and pointed out that past predictions of slower growth or jobs moving across state lines in response to raising the minimum wage have not materialized. Scores of individual businesses and trade associations such as Costco, Hopstop, ABC Home and Carpet, the Greater New York Chamber of Commerce, Buffalo First, and Syracuse First have also backed the proposal.

The minimum wage proposal approved by the Assembly last spring would also establish automatic annual adjustments to the state minimum wage to keep pace with the rising cost of living. This key approach, known as “indexing,” has already been adopted by 10 states and has proven critical for ensuring that the real value of the minimum wage does not erode over time. States that automatically adjust their minimum wage each year also provide more predictability for small businesses who need not worry that their payroll will be made into a political football each time a wage increase is necessary.  

Raising the minimum wage is supported by the best economic research. The most rigorous national studies show that the scores of minimum wage increases that U.S. states adopted during the 1990’s and 2000’s raised worker pay without causing job losses – even when the economy was weak. These studies also demonstrate how previous research cited by corporate interests failed to control for key variables, such as basic differences in population, job growth trends, and local economies across regions of the country.

Governor Cuomo is right: New York state legislators should raise the wages of the state’s lowest-paid workers before increasing their own salaries. The state’s economy and thousands of low-wage workers cannot wait any longer.

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org and www.raisetheminimumwage.org