Testimony on Local Government Minimum Wage Authority

April 30, 2014. In testimony presented before the New York City Council, FPI’s James Parrott reviewed several reasons why it makes sense for New York State to authorize cities and counties to establish higher minimum wage levels than the statewide minimum. Parrott’s testimony cited data showing that there are wide disparities across counties within the state in terms of the local cost of living, and that there is a similar wide disparity in median wage levels, particularly between New York City and suburban counties on the one hand, and most upstate counties on the other. His testimony also pointed out the disparate living wage levels currently established by local governments that apply to companies and organizations providing services under local government contract.

Parrott pointed out the flurry of activity just since the first of the year around the country with six states raising their minimum wage levels, bringing to 26 states altogether that have raised minimum wages above the $7.25 minimum wage level. Even when New York State fully phases in a currently legislated minimum wage increase to $9.00 an hour by 2016, the purchasing power of the minimum wage will still be 25 percent lower than achieved in 1968 when the minimum wage was $1.60. State minimum wages are set to increase to a level of $10 or more in four states (CA, MD, HI and CT) , and as a result of the fact that they index their minimums to inflation, both Washington and Oregon likely will pass $10 an hour within a few years. The District of Columbia recently acted to raise its minimum wage to $11.50 an hour in mid-2016, and two neighboring Maryland counties followed suit. Major cities including San Francisco, Seattle, San Diego, and Oakland are considering raising their minimums to $12-$15 an hour.

Finally, a recent poll of small business owners found that 74% of small business owners in New York State support raising the minimum wage and indexing it to rise with the cost of living. The poll, conducted by the Small Business Majority, also found that two-thirds of small business owners believe local economies should be allowed to set and increase their own minimum wage “to supplement an increase in the state’s minimum wage in order to ensure it makes sense for local economies.”