It is not a secret that New York is a challenging state in which to do business because of our high taxes and oppressive regulatory scheme. Some, but not all, of these policies originate out of New York City which faces different demographics and economic conditions than we do in Upstate New York. A big push this year by many NYC legislators has been to raise the state’s minimum wage. Under current law, the minimum wage is $8.75 an hour and it is set to raise to $9 an hour on Dec. 31, 2015. The NYC-dominated Assembly Democratic conference wants to raise it to $15 an hour by 2019 for NYC and its suburbs and to $12.60 an hour by 2019 for the rest of the state. Thereafter, it would be tied to the rate of inflation.
Not to be outdone, the governor has gotten into the mix and is advocating that the minimum wage for fast food workers be increased to $15 an hour. In an effort to bypass the legislature, where winning approval of such an increase is unlikely, the governor has empaneled a Wage Board. Under the law, minimum wages for certain industries can be set administratively by the Commissioner of Labor following a recommendation by the Wage Board. Given the fact that the Commissioner of Labor and the three members of the Wage Board are all governor appointees, it would be very surprising if they didn’t end up supporting a $15 minimum wage for fast food workers.
Regardless of where you stand on a minimum wage increase, using the Wage Board to increase the minimum wage in certain industries sets a terrible precedent. It is difficult to understand why workers at fast food restaurants such as McDonald’s who earn minimum wage should get a 58 percent wage increase compared to workers at other restaurants doing similar jobs. Some say the difference is that fast food restaurants can afford it. Perhaps that is true. However, the money to pay these large increases in wages has to come from somewhere and, if history is any indicator, it will either come from higher efficiencies (i.e., doing more with fewer employees) or higher prices. I fear that if raised to $15, we are going to see many hard-working individuals, who rely on this income to provide for themselves or their families, lose their jobs making it even more difficult to make ends meet.
In addition, if the governor can pick the fast food industry to raise the minimum wage, what is to prevent him from choosing other industries. Theoretically, he could begin to raise wages across all sectors of our economy taking market forces completely out of the picture. If New Yorkers want a large increase in the minimum wage, at the very least it should be accomplished through the political process just like other major initiatives where elected legislators who represent all areas of the state have an opportunity to debate and vote on the issue.
Minimum wage serves a purpose. However, it is best set at the federal level so all employers are working on a level playing field across the country. If the governor’s and the NYC legislators’ purposes are to raise low-wage workers out of poverty, there are much more effective ways to do so other than mandate wages on employers. According to the U.S. Department of Labor, 55 percent of workers receiving minimum wage are younger than 25 and more than two-thirds of minimum wage workers (68 percent) are part-time workers. We should not put these workers’ jobs at risk under the dubious claim that if we mandate an increase in their wages, they will automatically ascend to the middle class. We would be much better off using tools like the earned income tax credit, or providing better access to education and job training, or ultimately increasing job opportunities.
If you have any questions or comments regarding this or any other state issue, please contact me. My office can be reached by mail at 200 North Second Street, Fulton, New York 13069, by email at [email protected] or by calling 598-5185. You can also friend me, Assemblyman Barclay, on Facebook.
