2015-12-09 / Front Page

Minimum Wage Breakfast

By Thomas Cogan

One of the first meetings of December was a panel discussion—debate would be an equally accurate word—sponsored by City & State magazine about the plan in New York state to raise the minimum wage to $15 per hour. At a Wednesday morning breakfast at New York Law School on West Broadway in Manhattan, six panelists talked about the plan, which is being promoted energetically by Governor Andrew Cuomo.  By either clever design or happy accident, the panel was arranged from liberal on the left to conservative on the right.  Liberals argued that the minimum wage was necessary to give low wage workers payment they could live on, and at the same time help them get away from public-funded assistance. Conservatives said it was self-defeating inasmuch as it would badly disrupt the operations of small business and in reality do nothing to stem the prevalence of subsidy payments to many of the working class.

The meeting was opened by somebody not on the panel, but since Alphonso David is counsel to Governor Cuomo his positive opinion of the minimum wage mandate was assumed.  He quickly dismissed the contention that the minimum wage would mainly be of benefit to teenagers, who are usually associated with fast food jobs.  He said that the average low wage worker is approximately double that age, being 35 or somewhat more.  Average yearly earnings for them are $18,000, David said, a total that quickly becomes overwhelmed by expenses.  He called it “unlivable” and added that fast food workers take in an average of $6,800 in subsidies and public welfare.  As for the alleged bad effect a minimum wage increase has on small business and the economy, David said that between 1991 and now in New York state there have been eight raises in the minimum wage, and they have never affected employment adversely.

Viewed from left to right, the panelists were:  Paul K. Sann, general counsel, National Employment Law Project; Hector Figueroa, president of 32 BJ, the builders’ union; Assemblywoman Michaelle C. Solanges of the 22nd Assembly District in Nassau County; Carlo Scissura, president and CEO, Brooklyn Chamber of Commerce; State Senator Jack Martins, 7th Senate District, also of Nassau County, chairman of the senate labor committee; and E. J. McMahon, president, Empire Center for Public Policy. 

Earlier this fall, Governor Cuomo proposed a $15-per-hour wage minimum, to cover workers in all industries.  The current hourly minimum, $8.75, is on schedule to rise to $9 by the end of the year.  The governor’s plan is to have the $15 minimum in effect in New York city by the end of 2018 and outside the city by the end of 2021.  Sann led off, saying that two to three million workers in New York state would see pay increases if and when the $15 minimum wage mandate is finally realized.  That amount is not crushing, he asserted; big business has enjoyed lots of profits while wages have effectively sagged since 2000.  He even rebutted E. J. McMahon’s anticipated commentary on the minimum wage before McMahon had a chance to state it.  Figueroa called the $15 dollar goal a “meaningful compromise,” though even when it is implemented, “we will still find many workers struggling.”  Solages cited 100 of her fellow members in the state assembly who are in favor of it.  Scissura said he’d listened to 2,200 businesspersons in Brooklyn and concluded that he should “come down fully” in favor of a wage increase.  Yet, he understood skeptics’ fears that the minimum wage and paid sick leave could become impossible expenses for them.  State Senator Martins wondered why the minimum wage target figure was $15.  He believed it would have a bad effect on seniors and small business.  As chairman of the labor committee, he has held hearings on the “skills gap,” which he said is a largely overlooked issue.  There are 100,000 jobs in the state that are unfilled at present because the workforce that could fill them barely exists, with thousands of ill-trained workers available instead, the senator said.

McMahon found the $15 figure little more than arbitrary, imagining “Fast food fighting for 15” as a handily alliterative chant for its champions.  By comparison, the highest minimum wage proposal outside New York is the one in Massachusetts for $11.  He called $15 the highest minimum wage demand ever, representing a two-thirds increase over the $9 that isn’t even in effect yet.  With such an increase, he said, marginal workers’ jobs will be swept away as an immediate consequence.  The whole minimum wage drive is pegged to fast food work, while other industries will be negatively impacted, he said.  As for a uniform $15 minimum statewide, he predicted it would be “massively destructive” to industry in general, with a lot of desperate job-switching.  The assertion that this new minimum wage would lessen the need for public assistance struck him as regarding the issue from an “extremely peculiar angle,” since public assistance is in the form of the Earned Income Tax Credit (EITC), a federal measure.

Sann spoke in favor of an expanded EITC.  He admitted that according to a study made in California, there can be a “slight adverse effect” on growth with a minimum wage hike, but growth soon recovers.  He said the effect of several local minimum wage increases he’d studied was positive.  He backed the belief that the cost of public assistance is lessened when minimum wage increases become effective.  But Martins, who had voted for the minimum wage increase in 2013, was shocked by what he sees as a radical, non-incremental jump to $15.  Figueroa waxed analogous, saying that one can’t repair one’s roof with only a stepladder.  McMahon said he harbored the “vain hope” that those studying the economics of proposed wage increases would look beyond politics and constituencies to the true economic picture as they try for best results.  Martins said that democracy matters, especially against what he believes is executive action by Governor Cuomo in rushing to raise the minimum wage so much and so quickly.




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