Minimum Wage to nearly double

In 2012 New York State had a poverty rate of 25.9%, the 21^st highest in the United States. Governor Cuomo has created a ten-step plan to help combat this issue. With St. Lawrence County having the third highest poverty rate in the state at 21.4%, it is an issue that needs to be addressed at the state level. The Ten Point Plan was mentioned in the Governors 2015 Opportunity Agenda and outlines the way to battle poverty and fight pay inequality.

The minimum wage currently stands at $8.75, which was a $.75 increase from the previous $8 that was enacted December 31^st 2013. Governor Cuomo is pushing for an increase in the minimum wage to $10.50 across the state and $11.50 in New York City. The increase is to keep up with the annual inflation and residency costs because New York has some of the highest costs of living. While a reasonable wage is needed to survive, will increasing the minimum wage drastically help or hurt the economy?

New York City Mayor de Blasio recently went to Governor Cuomo and asked to pass legislation that would increase minimum wage exceeding $13 and hour in New York City. The New York Times states that increasing the minimum wage by such a dramatic increase could halt economic growth and actually increase the rate of inflation. From 1962 through 2000, a total of 38 years, minimum wage has increased just $3.45. Since 2000, the rate at which minimum wage has increased is nearly three times what it has been in previous years.

The City of Oakland California recently increased their minimum wage to $12.25, a 36% increase from the year before. While this may be good news from many of the employees, it also can have a negative impact on the economy. Many people get laid off because companies can not afford to keep paying these wages, inflation, and the rise of prices for consumer goods. The SF Gate reports that the city’s booming restaurant industry has already had a negative impact by these increases.  Restaurants have to increase their prices nearly twenty percent to account for the minimum wage spike. This is just one example of an industry that has been effected the SF Gate states and there will be many more to come.

While New York feels the need to increase the wage to a higher amount to account for the high standards of living, this could also have a damaging effect. Will wages continue to increase as consumer prices continue to rise and turn into a never ending spiral? Will Governor Cuomo look at other cases of minimum wage hikes as a reputable asset or will he ignore it totally and increase the minimum wage without preforming studies on the possible effects?

Information retrieved from: https://www.governor.ny.gov/news/2015-opportunity-agenda-restoring-economic-opportunity-5

http://www.sfgate.com/restaurants/article/Minimum-wage-hike-hits-booming-Oakland-dining-6115583.php

http://www.labor.ny.gov/stats/minimum_wage.asp

http://www.nytimes.com/2015/03/06/nyregion/mayor-de-blasio-appeals-to-businesses-to-raise-workers-pay.html