Boost the Minimum Wage? Yes, to raise living standards

October 27, 1999. An op ed by James A. Parrott, Daily News.

Minimum Wage Fact Sheet

October 1999. In a nutshell:

The Minimum Wage and New Yorkers’ Hourly Wages Have Declined.

  • Despite sizable growth in the productivity of our nation’s economy over the last 30 years, the purchasing power of the federal minimum wage has fallen by one-third. · The value of the minimum wage has dropped to less than 40 percent of average hourly earnings, down from over 50 percent in the 1960s.
  • In the 1960s and 1970s, the earnings of a full-time, year-round worker receiving the minimum wage were enough to lift a family of three above the poverty line. Now, such a worker’s earnings fall 18 percent below the poverty threshold for a family of three.
  • Statewide, even with the 4 increases in the minimum wage in the 1990s, the real hourly earnings of low wage workers has fallen by 7 percent from 1989 to 1998. This compares to a 3.5 percent increase nationally. A minimum wage boost would help redress the erosion in living standards that has been greater in New York City and State than in the rest of the country.

New York Has a Growing Low Wage Problem.

  • Low pay is one of New York’s biggest economic challenges, with more New Yorkers working but earning wages that are not sufficient to lift them above the poverty level. · The number of working poor families has jumped disproportionately in New York, by 60 percent since the late 1980s (more than 2 times the national increase) and by 84 percent in New York City. Over 1 million individuals live in working poor households in New York State.
  • Nationally the poverty rate has declined, but in New York it remains stubbornly high. New York City’s poverty rate of 24 percent is almost twice the national average of 13 percent, and in the state the poverty rate has stuck at 17 percent for the past five years.
  • One million New York workers would benefit from an increased minimum wage.

Who are the Minimum Wage Workers in New York State?

  • Over half of minimum wage workers work full time in New York State.
  • The vast majority of the state’s minimum wage workers are adults, with 78 percent 20 years or older. In New York City, an even greater share, 84 percent, are adults.

Increasing the Minimum Wage Means More and Better Jobs.

  • Despite dire predictions to the contrary, the 1996 and 1997 increases in the minimum wage were accompanied by increases rather than decreases in private job growth in New York City.
  • Numerous studies have effectively debunked the claims that minimum wage increases cause significant job losses. Higher wages for low-income workers lead to more economic activity and employment in low-income communities.
  • A higher minimum wage can actually make work more attractive, thus increasing the supply and commitment of employees. Reduced turnover on the job leads to increased productivity. And as work brings higher returns to the worker and employer, business may find more reason to invest in a quality labor force.
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