“It’s utterly unprecedented in the United States,” said Paul Sonn, legal co-director of the National Employment Law Project in Washington, D.C. “We’re not aware of any state that has adopted a tax credit remotely resembling this one, which will have the taxpayer pick up the tab for the cost of the minimum wage increase for a certain category of worker.”
Cuomo’s office estimates the cost to taxpayers at $230 million for the first four years of the credit, 2014 to 2017. But a Post-Standard review of statistics from the Census Bureau and the Fiscal Policy Institute show the cost could be more than $440 million.
The higher estimate relies on Fiscal Policy Institute data – drawn from the U.S. Census Bureau — that shows teens work 52 weeks a year, rather than the 35 weeks a year assumed in Cuomo’s estimates. In addition, the higher figures reflect an increase in the number of teens who earn more than $8 but less than $9 an hour who would be available for the credit in succeeding years as the wage and credit rise.
And that doesn’t factor any increase in the numbers of teens that employers may hire instead of adults 20 and older.
“The magnitude of the taxpayer cost depends heavily on how employers react in terms of substituting student teenagers for older workers,” said James Parrott, deputy director of the Fiscal Policy Institute.