Letter: Minimum-wage hike would cut jobs

New York Gov. Andrew M. Cuomo speaks in

New York Gov. Andrew M. Cuomo speaks in the Red Room at the Capitol in Albany. (Jan. 7, 2013) (Credit: AP)

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Gov. Andrew M. Cuomo's plan to increase New York's minimum wage by more than 20 percent to $8.75 should worry New Yorkers ["Cuomo pushes equality plan," News, Jan. 11].

The proposal may appear beneficial, but the actual effects of such a hike will be fewer opportunities for less-skilled job seekers in a state where more than a quarter of them already can't find work.

Businesses that hire entry-level employees and pay them minimum wage -- restaurants or grocery stores, for example -- often keep 2 to 3 cents in profit from each sales dollar; they can't just absorb the increase. Raising prices on cost-conscious customers typically isn't an option, either, because sales fall as a result. Businesses are instead forced to provide the same service at a lower cost -- that means more self-service, and fewer job opportunities for the same people the governor is concerned about.

The evidence backs up the intuition: Recent research published in a Cornell University academic journal found a greater than 20 percent drop in employment for less-educated New Yorkers following the last state-mandated wage hike.

Michael Saltsman, Washington

Editor's note: The writer is the research director for the Employment Policies Institute, a fiscally conservative, nonprofit research organization that studies employment issues.

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