Minimum Wage Hike Stands Better Chance in 2013

Jan 24, 2013

Governor Andrew Cuomo has proposed raising the minimum wage as part of his budget plan, even though the increase would not cost New York State any money.  That tactic might make it easier for the proposal to become law.

Last year, Cuomo did not advocate for raising the minimum wage until the final weeks of the legislative session, in June. Republicans, who controlled the state Senate, resisted the effort, arguing that it would “kill” jobs. This year, Cuomo has put the proposal to increase the minimum wage to $8.75 an hour into his budget proposal released this week, giving Republicans the choice of accepting the idea or potentially rejecting the entire state spending plan.

This time, Senate GOP Leader Dean Skelos was noncommittal, saying he had not yet fully examined all of the proposals in the governor’s spending plan.

“My biggest concern is not hurting small business,” said Skelos. “Which are the job creators.”

The power dynamics in the Senate have also changed. Republicans lost seats in the November elections and now run the Senate in a power sharing agreement with several Independent Democrats, most of whom strongly back the minimum wage hike.

Michael Kink, with the progressive group the Strong Economy for All Coalition, says Cuomo’s strategy shows that he is serious about getting a law passed that would bring New York from the 20th highest minimum wage in the country, to the number three position.

“It puts it firmly on the front burner for the legislature,” said Kink. “Most members are going to be hard pressed not to vote for it.”

Even the Retail Council of New York State, a lobby group, is backing the idea of raising the minimum wage, with some conditions. The council’s Ted Potrikus says his members can see both sides of the issue. He says retail shop owners are not just employers, they are also selling goods to customers.

“They want to come in and buy things,” said Potrikus, who says because of low wages sometimes they “can’t come in and buy things.”

He says retailers, though, would prefer to see any increase phased in. He says the $1.75 an hour jump would be difficult for businesses to afford.  The Retail Council also proposes a provision for automatic minimum wage increases in the future, based on the rate of inflation.  But Potrikus says it’s not a matter anymore of if the minimum wage will be increased in New York, it’s now a question of when the increasingly popular idea will be adopted.  He says a recent poll shows 80 percent of New Yorkers want the minimum wage increased.

“These are the people who come into our stores,” said Potrikus. “What do we say to our customers? You know the customer is always right in retail.”

The Business Council of New York State is still a hold out. The Business Council’s Ken Pokalsky says some workers will lose their jobs, and others will see their weekly hours cut back if the minimum wage goes up.  He says the increase proposed by Cuomo would cost the average business $3,000 a year per worker.

“That money’s got to come from somewhere,” said Pokalsky. “Some businesses are going to buy less labor, they are going to have fewer hours or fewer employees. That’s not good for the economy.”

Pokalsky says less than half of minimum wage earners are heads of households. And he says there are state and federal earned income tax credits to offset burdens faced by low income workers.  He says the focus should instead be on creating more high paying, skilled jobs for New Yorkers.

“We need to bring back, restore, retain manufacturing jobs; we need to get the construction industry back,” said Pokalsky. “We need to reclaim the financial service industry jobs we lost.”

Another debate centers on whether the minimum wage should rise automatically in the future, indexed to the rate of inflation.  Assembly Democrats favor that proposal, but Cuomo did not include it in his budget plan.