Empire Justice Memo of Support: Raise New York’s Minimum Wage!

Empire Justice May 15, 2012

One of the core principles of work in the United States is that the paycheck you take home should provide for the basic necessities of life. Yet, an increasing number of workers making minimum wage find themselves living in poverty. A raise in New York’s minimum wage will help over one million New York workers pay for their basic needs. A. 9148 will raise New York’s minimum wage from $7.25 to $8.50 and index it to inflation to keep pace with the increasing costs of living.

Currently, New York’s minimum wage rests at the federal level of $7.25/hr or $15,080 a year.[1] For a family of three, this is nearly $5,000 below the federal poverty line. If New York’s minimum wage had kept pace with inflation over the past 40 years, it would now be $10.80/hr.[2] An increase from the current minimum wage of $7.25/hr to $8.50/hr would benefit over 11% of all New York workers, over one million New Yorkers.[3] By increasing the minimum wage, New York has the opportunity to help low wage workers support their families, stimulate economic growth, and create jobs.

  1. Raising the Minimum Wage will Reduce Economic Inequality and Protect Workers from Poverty: New York State continues to have the largest gap between rich and poor in the country, yet eighteen states have higher minimum wages than New York. Neighboring states Connecticut ($8.25), Massachusetts ($8.00) and Vermont ($8.46) all have minimum wages of $8.00 or more.[4] Washington State ($9.04) boasts a minimum wage nearly two dollars more than that of New York.[5]Unfortunately, for many workers here in New York, being paid the minimum wage does not lift them out of poverty; it keeps them in poverty with no way out.[6] It is nearly impossible for low-wage workers to support their families and pay for basic life necessities on $15,000 a year. Raising the wage floor is essential to lifting thousands of workers out of poverty and reducing economic inequality in our state.
  2. There is Broad Bi-Partisan Support for Raising the Minimum Wage: Raising the minimum wage draws popular support from all income levels and political affiliations, including independents and Republicans. Recent polling found that two-thirds of U.S. residents support raising the minimum wage to $10/hr and indexing it to inflation.[7] The latest New York poll conducted by the Siena Research Institute found that 78 percent of New York voters — including 88 percent of Democrats and 58 percent of Republicans — support increasing the state’s minimum wage to $8.50/hr.[8]
  3. Increasing Numbers of New York Workers Spend Their Careers in Low-Wage Jobs: 84% of the workers who would benefit from an increased minimum wage in New York are adults.[9] According to the National Employment Law Project, a majority of the jobs lost during the recession were mid-wage occupations like manufacturing and construction, while growth industries include predominantly low-wage occupations like food service, retail, and home health care.[10] In fact, seven of the top ten growing occupations over the next ten years are in low wage occupations.[11] Raising the minimum wage for these workers is increasingly important as more and more working families are relying on minimum wage jobs to get by.
  4. Raising and Indexing the Minimum Wage Will Boost the Economy and Stimulate Job Growth:  With more people than ever working in low wage occupations, coupled with the rising cost of rent, utilities, gas and food, it is shocking that in the last five years New York’s minimum wage has risen only ten cents. On January 1st, 2012 eight states raised their minimum wages based on annual indexing. A recent study by the Economic Policy Institute shows that these increases, which ranged from $0.28 to $0.37 above the previous minimum wages resulted in the creation of over 3,000 new full-time jobs and will ultimately generate nearly $366 million in additional Gross Domestic Product for those states.[12] Furthermore, the Fiscal Policy Institute estimates that tying our minimum wage to the rising cost of living in the state of New York will pump much needed spending into local economies across the state thanks to the increase in purchasing power of low wage workers.[13] This is due to the acknowledged fact that working families spend the majority of their incomes on necessities and services at local businesses. This influx of money into communities will create an anticipated 7,500 new jobs in New York State.[14] Based on this research, it would be highly beneficial for New York to adopt a progressive and compassionate approach to minimum wage with an indexing system that acknowledges rising costs of living.
  5. Taxpayers Currently Subsidize Large Corporations who Pay Poverty Wages: Large corporations profit from a system that allows them to pay poverty wages to workers who rely on public assistance, food stamps, and Medicaid, in order to survive.[15] Taxpayers are footing the bill while companies reap profits off the backs of low wage workers who qualify for public benefits and need to eat at soup kitchens to make ends meet. Raising the minimum wage will go a long way toward addressing this form of corporate subsidy.
  6. Raising the Minimum Wage will Primarily Affect Large Corporations, Not Small Businesses: The majority of low-wage workers in New York are employed by large corporate chains not small mom and pop shops.[16] In fact, small businesses have a track record of paying higher wages than their large corporate counterparts. In New York’s retail industry, for example, small businesses pay 23% more than large retail chains.[17] A strong minimum wage will create a level playing field for all businesses in New York, and will especially benefit those businesses that are already taking care of their workers, creating high quality jobs, and continue to face the constant pressure of a race-to-the-bottom economy.

Empire Justice Center believes that all workers deserve a living wage to meet their basic needs and that that there should be no such thing as the working poor.  We whole heartedly support raising the minimum wage to $8.50, and indexing it to inflation, as a critical step in that direction. We urge both houses to pass A.9148 and give poor working families a desperately needed and hard earned raise this year.



[1] National Employment Law Project, Assembly Bill 9148: Key Facts on New York’s Minimum Wage (March 2012), available athttp://www.raisetheminimumwage.com/media-center/entry/key-facts-on-new-yorks-minimum-wage/

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Tammy Bove, Testimony of Empire Justice Client at Assembly Minimum Wage Hearing in Buffalo Testimony (May 11, 2012), available at http://www.empirejustice.org/policy-advocacy/testimony/tammy-bove-testimony.html

[7] Public Religion Research Institute, Broad, Strong Support for Increasing the Minimum Wage and Indexing it to the Cost of Living (October 8, 2010), available at http://nelp.3cdn.net/ed7858ccb0d068a3f6_nwm6bnjpj.pdf

[8] Siena Research Institute, Minimum Wage Hike and Business Tax Cuts Strongly Supported (May 14, 2012), available athttp://www.siena.edu/uploadedfiles/home/parents_and_community/community_page/sri/sny_poll/SNY%20May%202012%20Poll%20Release%20–%20FINAL.pdf

[9] National Employment Law Project, supra note 1.

[10] National Employment Law Project, The Good Jobs Deficit: A Closer Look at Recent Job Loss and Job Growth Trends Using Occupational Data (July 2011), available at http://www.nelp.org/page/-/Final%20occupations%20report%207-25-11.pdf?nocdn=1

[11] Id.

[12] Economic Policy Institute, EPI Analysis of Current Population Survey, 2010 Annual Social and Economic Study (2010), available at http://www.nelp.org/page/-/rtmw/GDP%26JobsGrowthJan2012MinWageIncreases.pdf?nocdn=1

[13] Fiscal Policy Institute, The Case For Raising New York’s Minimum Wage (January 2012), available at  http://www.fiscalpolicy.org/FPI_BoostTheEconomyBoostTheMinimumWage_20120130.pdf

[14] Id.

[15] Tammy Bove, supra note 6.

[16] Fiscal Policy Institute, supra note 11.

[17] Id.