June 2, 2014. FPI’s James Parrott submitted testimony for the June 2 New York State Senate Labor Committee hearing on several minimum wage-related bills, including five bills that would authorize local governments to enact minimum wages above the statewide level, and one bill that would establish a statewide “living wage” of $15 an hour, indexed to inflation, for certain large employers and chain stores. The FPI testimony 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.
In support of local minimum wage authority, 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.
Beyond the bills considered at this hearing, there is a compelling need for New York to accelerate increases in the statewide minimum wage, and once it gets to a level close to the purchasing power that the minimum wage had through much of the 1960s and 1970s (between $10.50 and $11.50 in today’s dollars) then it should be indexed so that it rises each year along with inflation to prevent renewed erosion in its purchasing value.
Even when New York State fully phases in its 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. Many states and localities are pushing quickly past New York minimum wage level. Vermont acted recently to increase its minimum wage to $10.50 an hour by 2018—this is the highest level authorized for a state minimum wage as of today. Four other states (CA, MD, HI and CT) are on the verge of having a minimum wage of $10 an hour or greater, 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.
The Seattle City Council is voting today (June 2) on legislation to require a $15 an hour minimum wage from all employers by 2021, and other major cities including San Francisco, Chicago, San Diego, and Oakland are considering raising their minimums to $12-$15 an hour.
There are currently 3 million low-wage workers in New York State paid less than $15 an hour, including 1.25 million in New York City.