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Long IslandPoliticsSpin Cycle

Report claims $15 minimum wage would cut jobs for working poor, raise costs for all

A new study from those opposed to raising

A new study from those opposed to raising the minimum wage to $15 and hour says doing so cause the loss of jobs in small businesses on Long Island. This sign is part of an effort on July 22, 2015, to raise wages in the fast-food industry. Photo Credit: Yeong-Ung Yang

ALBANY - Opponents of raising New York’s minimum wage to $15 an hour said Thursday that legislating the highest state rate in the nation would cost Long Island 22,000 to 70,400 low-wage jobs.

The study by a right-center think tank found the politically popular proposal pushed by Gov. Andrew M. Cuomo would force employers to cut jobs. The study noted many minimum wage jobs are in restaurants and small business already operating on thin profit margins.

 “I suggest the governor take an economics class,” said economist Douglas Holtz-Eskin, an adviser to Republicans and the former director of the Congressional Budget Office that audits federal spending.

“There will be people who benefit . . . but there would be those who do not get hired who would have been hired,” he said in Albany in presenting his report with the Empire Center think tank.

The report stated that increasing the state minimum wage 67 percent from the $9 wage that will be in effect Dec. 31 would cost the state at least 200,000 jobs.

Holtz-Eskin also said the nation’s highest state minimum wage would also make New York less attractive to employers thinking to move to or expand in the Empire State, while raising the cost of goods and services for all consumers.

The $15 wage is now pushed by Cuomo and politically powerful unions after the measure failed to gain approval in the spring when sought by Assembly Speaker Carl Heastie (D-Bronx). New York City Mayor Bill de Blasio also sought a $13 minimum wage in the high-cost city tied to inflation that could become $15 by 2019.

The Senate’s Republican majority had opposed that measure as well as Cuomo’s proposal in the spring of a $10.50 statewide minimum, with an $11.50 minimum wage for New York City.

Now Cuomo is insisting on a $15 minimum wage, to match the rate his appointed Wage Board has ordered to be phased in for fast-food workers.

“The governor and a clear majority of New Yorkers believe that if you work full time you shouldn’t be condemned to a life of poverty,” Cuomo spokesman Rich Azzopardi said this week.

Cuomo said overwhelming evidence shows raising the minimum wage stimulates the economy, while Holtz-Eskin said a preponderance of economic research shows a higher minimum wage reduces employment.

 Although there have been many studies, there is no consensus on whether a minimum-wage increase helps or hurts a state’s economy because of the many factors in play.

But Empire Center president E.J. McMahon opened up a new front in the issue that is shaping up to being one of the most contentious in the legislative session beginning in January.

He said expanding the tax credit which allows the working poor to be refunded for most of all of their state, federal and New York City income taxes could boost their household income more than a minimum-wage increase without prompting employers to cut their jobs or others’ jobs.

The earned income tax credit refund tax payments to low and moderate income workers and was created to provide an incentive to work, rather than receive government social services.

Workers who qualify based on income and size of their family can be refunded some or all of the income tax withheld in their paychecks each year.  They may also receive more cash than they had withheld.

An earned income tax credit can be used by a single person making less than $39,131 or a married couple making less than $44,131 a year.


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