Groups say state minimum wage too low to live on
Business Council counters state should focus on creating better-paying jobs
CAPITOL Sara Niccoli would like to see an increase in the state’s minimum wage. But she’d be even happier if the state Legislature passed a living wage.
Niccoli is the director of the Labor-Religion Coalition of New York State, a group that has long supported raising the hourly wage of the state’s lowest-paid workers. They maintain that the current minimum wage of $7.25 an hour isn’t enough for most workers to live on, even if they work 40 hours a week.
A living wage is a wage that is based upon the cost of living in an area, and provides people who work 40 hours a week with enough money for housing, food and other basic necessities. Advocates peg the living wage in upstate New York at more than $10 per hour.
A bill to raise the state’s minimum wage to $8.50 an hour in 2013, and index it to inflation beginning in 2014, passed the Assembly earlier this year, but the Senate did not act on it.
Niccoli supports the minimum wage bill, as long as it includes automatic adjustments that are tied to the inflation rate. But she also said $8.50 an hour is still too low, and the Labor-Religion Coalition will continue to push for increases to the minimum wage until a statewide living wage is enacted. She would also like to see cities and counties pass their own living wage laws.
Raising the minimum wage would benefit the economy because low-wage workers tend to spend the money they earn and if they earn more they will spend more, Niccoli said. She also said the state should enact a living wage because it’s the right thing to do.
“We just don’t believe in hiring someone and not paying them enough to live on,” she said.
Mark Dunlea, the director of the Hunger Action Network of New York State, agreed.
“We will take a minimum wage of $8.50,” he said. “And then we will come back and ask for more.”
Dunlea said 36 percent of the people who use food pantries come from households where one or more adult is employed. “There are a lot of people who are working who are still in poverty,” he said.
The Business Council of New York State is adamantly opposed to raising the minimum wage, and also to the concept of a living wage.
Robert Lillpopp, director of communications for the Business Council, said raising the minimum wage would hurt the state’s economy by making it tougher for employers to hire more workers. He said the state should focus on creating better-paying jobs, rather than increasing wages for workers at the bottom of the economy.
“We need to create more good-paying jobs, so people can move up the chain,” Lillpopp said. He said that for the past decade job growth has been concentrated in low-wage industries, which is a problem. He also said there are better ways to help low-wage workers than raising the minimum wage, and suggested that the government consider expanding the earned income tax credit, which benefits low-income workers. “We need to strengthen our economy and bring back higher-paying jobs.”
The Retail Council of New York State does not support the bill to increase the minimum wage as it’s currently written, but would support a bill that implemented a minimum wage hike gradually “so that retailers have more time to accommodate the increase,” said Ted Potrikus, the organization’s executive vice president and director of government relations.
Potrikus said polls indicate there’s public support for increasing the minimum wage. A Siena Research Institute poll in August found that 80 percent of New Yorkers support increasing the minimum wage, and 18 percent oppose it.
“These are the same people who shop in the stores of the state of New York,” he said. “We’re hearing from our customers. We’re trying to find a way to say, ‘Is there a way we can do this so that we can afford it as merchants?’ ”
Potrikus said the Retail Council had not discussed or taken a position on the living wage issue.
The living wage movement has been gaining steam, in part because low-wage workers have been protesting. On Black Friday, workers at Walmart stores throughout the country walked off the job, calling for higher wages and benefits, and an end to what they described as retaliation for speaking out for better pay. Last week workers from fast-food chains throughout New York City staged walkouts and demonstrations calling for a living wage.
Niccoli said that some retailers, such as Costco and Trader Joe’s, have demonstrated that it’s possible to make a profit and pay workers a living wage.
New York’s minimum wage was last increased in 2009, when the federal minimum wage was raised to $7.25 an hour. Eighteen states have raised their minimum wage beyond the federal level.
Liberal groups, such as the Fiscal Policy Institute in Latham, maintain that raising the minimum wage would be beneficial to the economy because it would boost spending and help improve the living standards of workers below or near the poverty line. According to the FPI, raising the minimum wage to $9.80 an hour, as federal legislation has proposed, would benefit 1.5 million New Yorkers, and the additional consumer spending would create 100,000 jobs.
But a recent paper authored by professors at San Diego State University, Cornell University and the University of Oregon found that the minimum wage increase that occurred from 2004 to 2006 resulted in a 20.2 percent to 21.8 percent reduction in employment to younger, less-educated people, particularly those between the ages of 16 and 24.