$1 increase in minimum wage at year-end gets nod from state
Demonstrators favoring changes to the minimum wage protest at Farmingdale State College last year. Credit: Jeff Bachner
A phased-in rise of the state’s minimum wage to $15 will continue unabated because the hike in hourly pay has had “a negligible” impact on the labor market, Gov. Andrew M. Cuomo announced Thursday.
Cuomo and state lawmakers approved legislation in 2016 that increases the minimum wage from $9 to $15 over time. The pay raise is being implemented more quickly on Long Island and in New York City than upstate.
The hourly minimum in Nassau and Suffolk counties is now $12 and will increase by $1 on Dec. 31. It will reach $15 in 2021.
The wage rise could have been suspended or slowed under the 2016 law if the state Division of the Budget determined the hike was increasing joblessness and discouraging employers from hiring. The division’s six-page assessment was made public on Thursday.
“The decline in New York’s unemployment rate to some of the lowest levels on record imply that the recent minimum wage increases have been absorbed with negligible, if any, impacts on labor demand,” the budget division wrote.
“There is no definitive evidence to-date that the positive impact the state’s rising minimum wage has had on the incomes of low-wage workers has been associated with any significant loss of jobs ... The current outlook for continued growth in employment and wages at a moderate pace should allow the state labor market to absorb the minimum wage increases scheduled for 2020,” the division said.
The division’s assessment was insisted upon by the State Senate, which in 2016 was controlled by Republicans. At the time, they argued raising the minimum wage could damage the economy and that periodic reviews of the hike’s impact were necessary before implementation continued.
Locally, farmers, restaurants and manufacturers have complained about the wage increase, with some installing self-service kiosks to take customer orders and installing robots on production lines.
Patrick Boyle, executive director of the manufacturers' group Ignite Long Island, said factories with low-skilled jobs and low wages were hit hardest. Meanwhile, those with high-skilled jobs were forced to raise salaries in order to keep employees, he said.
"New costs of doing business with no return on investment drove many Long Island manufacturers to consider relocating to other regions of the country," Boyle added.
Statewide, higher pay for health care workers has contributed to the state's growing Medicaid bill, which in turn has created fiscal problems for the Cuomo administration.
E.J. McMahon, research director at the Empire Center for Public Policy, a conservative think tank in Albany, said the budget division's assement "ignores the budgetary impact of the minimum wage." He noted that two weeks ago the division forecast a $6 billion budget gap for the 2021 state fiscal year, saying the main culprit was "the excess Medicaid spending" caused by the minimum wage increase.
McMahon called Thursday's report on the wage hike "a remarkably flimsy, misleading and superficial analysis."
In the report, the budget division said the 2019 unemployment rate of 3.5 percent in Nassau, Suffolk and Westchester counties is the lowest in the state.
Cuomo said, “Nearly three years after we set New York on a path to achieve a $15 minimum wage, we are seeing the benefits: record low unemployment rates, fewer people living in poverty, less people working multiple part-time jobs and more families given the opportunity to live a decent life.”
In New York City, employers with 11 or more employees reached the $15 per hour minimum a year ago while those with 10 or fewer employees will reach it on Dec. 31.
Nationwide, the minimum wage is $7.25 per hour. Thirty-two states and U.S. territories have higher pay rates, with the highest being $13.25 per hour in the District of Columbia, according to the National Conference of State Legislatures.
WAGE HIKE
On Long Island, the minimum wage is now $12 per hour. It will increase by $1 on Dec. 31 and reach $15 in December 2021.
In New York City, the minimum wage has been $15 per hour for employers with 11 or more workers since last year. For employers with 10 or fewer workers, the minimum wage is now $13.50 and will rise to $15 on Dec. 31.
SOURCE: NYS Department of Labor
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
