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Op-ed column: Let’s up the ante

NYS must find way to increase its minimum wage

Sunday, July 8, 2012
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John Daly/For The Sunday Gazette
John Daly/For The Sunday Gazette

The cost of living continues to rise year after year, making basic necessities more expensive, which can greatly burden lower-income families. All the while, the minimum wage in New York has barely budged in the past five years.

According to the U.S. Bureau of Labor Statistics, 1.7 million workers earned the federal minimum wage last year. New York accounts for roughly 5.4 percent, or 91,000, of those workers.

Furthermore, in 2008, the BLS estimated that only 6,000 workers made minimum wage in New York, which accounts for an increase of 1,417 percent from 2008 to 2011. That statistic should be very disconcerting for New Yorkers.

So while the state does meet the federal level for minimum wage, an individual under the age of 65, currently making $7.25 an hour, would take home just over $15,000 a year. That’s not much higher than the state poverty threshold of $11,702. And if that individual happens to have a child under the age of 18, then they actually fall below the poverty threshold of $15,504.

Demoralizing conditions

It’s no wonder that some individuals would rather not work at all and live off welfare and other government-assistance programs. How demoralizing is it for a single parent to raise a child, work 40 hours a week and still qualify for government assistance? For a parent to not be able, by government standards, to adequately provide for themselves and their child on their own can have a damaging effect on their outlook on life.

The state clearly needs to do more to incentivize working and change the culture of government dependency that negatively affects the morale of every social class. Increasing the minimum wage is a step in the right direction.

It’s a fact that 18 states have higher minimum wages than the current federal level, and 10 states actually base their minimum wage rates on the annual rate of inflation. Neighboring states such as Massachusetts, Vermont and Connecticut all have minimum wage rates higher than the federal level. Even Alaska and Arizona, two deeply red states, have higher minimum wages than New York.

New York is supposed to be a progressive and forward-thinking state, but when it comes to the minimum wage and taking care of individuals and families that need help the most, it fails to meet its own standards.

A bill that would have raised the state’s minimum-wage to $8.50 failed in the Senate earlier this year, despite being endorsed by the Greater New York Chamber of Commerce.

Two main talking points have come from the bill’s detractors: raising the minimum wage would hurt small businesses, and would also lead to higher state unemployment.

These talking points are devoid of facts, and are similar to the arguments made against raising taxes on the wealthiest Americans.

It seems that whenever attempts are made to help impoverished and lower-income citizens, some advocacy group or party rises up and cries how such actions will have an adverse effect on the economy.

The bill that passed in the Assembly called for a near 15 percent bump in the minimum wage, which would have placed New York third behind Oregon and Washington as the states with the highest minimum-wage rate.

Given the fact that the economy remains anemic and many economists have projected unemployment to go unchanged throughout the remainder of year, a raise of that magnitude might cause some New York business owners to panic. Like Wall Street investors who speculate and overact to stock fluctuation, business owners might cut costs, raise prices and reduce staff out of fear and unreason. This is, of course, what the detractors want you to believe will invariably happen.

Incremental increases

In order to reduce the possibility of panic, it might be more pragmatic for the Legislature to amend the bill and call for incremental minimum-wage increases over the next two to three years, which would eventually reach $8.50. If business owners feel more eased into the raises and less coerced by government, then it makes for a better bill and could lead to passage in the Senate.

It could also be argued that increasing the minimum wage will boost the state’s economy, as we could see an increase in consumer spending, which accounts for roughly 70 percent of national GDP.

Consumer spending means personal consumption. The more money an individual makes, the more likely they will put that money back into the economy. It’s the circular flow of income, the process of income circulating between consumers and producers, which is how our economy works.

You can’t buy a flat-screen TV with welfare checks, but you can if you make an extra dollar or two an hour. Spending helps the circular flow, thus raising the minimum wage is likely to help the economy.

The more people earn, the less they depend on government assistance. No one can argue that, and therefore increasing the minimum wage in New York is the right thing to do.

Robert Caracciolo lives in Schenectady and is a regular contributor to the Sunday Opinion section.

 
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comments

July 8, 2012
12:36 a.m.
hodgkins.t says...

The new minimum wage must also be indexed to the Urban Consumer Price Index to ensure that workers do not have their wages eaten by inflation in a few years.

July 8, 2012
7:28 a.m.
manjoe says...

Increasing the minimum wage will backfire by reducing employment opportunities for teenagers, seniors and people with poor job qualifications. What's needed is a robust economy so that employers can justify raising wages based on their revenues rather than government mandates.

July 9, 2012
10:20 a.m.
hodgkins.t says...

People who work in minimum wage jobs spend a greater portion of their income- less saving- than those with higher incomes. The increased money injected into the economy from a wage increase will create jobs.

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