Let New York City Set Its Own Minimum Wage

David R. Jones, The Urban Agenda

Observing Mayor Bill de Blasio in the early days of his administration, it’s pretty clear that he is wasting no time trying to fulfill many of his campaign promises.  Indeed, the mayor appears to still be in campaign mode as he gears up for the battles looming ahead -- delivering universal pre-k and negotiating new municipal labor contracts.

Coming on the heels of his proposal last month to amend the city’s Earned Sick Time Act and extend protections to 500,000 additional New Yorkers, the mayor used his State of the City address on Monday to call for increasing the number of living wage jobs offered by employers who receive city contracts and subsidies. Both policy measures are consistent with the mayor’s pledge to lift the floor on wages and benefits for workers at the lower end of the economic ladder. Next week the mayor will begin an effort to persuade Albany to give New York City the power to raise the minimum wage in all five boroughs.

Playing Catch Up

New York City wouldn’t be the first city to set its own minimum wage; in fact we would be a little late to the game.  Several cities and other municipalities across the country have the state-granted authority to set their own minimum wage and have done so to ensure better wages for low-wage earners. 

In San Francisco, the minimum wage is $10.74 an hour, and rises every year in relation to changes in the consumer price index.   The new mayor of Seattle is moving forward with plans to enact a $15.00 an hour minimum wage for city workers, with a panel investigating the effects of a citywide $15.00 an hour minimum wage.  These are but two examples of a growing trend.  

For many in Albany, the issue of the minimum wage was put to bed last year when legislators reached an agreement after months of negotiation.  Kudos to the mayor for attempting to wake it back up.

The state minimum wage went up from $7.25 to $8.00 an hour on January 1st, thanks to the deal reached by legislators last year. It will increase in phases until it reaches $9.00 at the start of 2016.  It was a positive step for the millions of workers and their families who will benefit from the deal.

Indexing Minimum Wage to Inflation

A positive step, but not nearly enough.  About a quarter of all minimum wage workers in the city are African-American. We need to keep growing the minimum wage in New York. Otherwise it loses value each year. Another benefit of increasing the minimum wage is that it relieves the burden on government programs like food stamps and public assistance.

In many states, the minimum wage rises automatically every year to adjust for inflation. Indexing the minimum wage to inflation was a key component of the original deal being worked on in Albany.  However, in the negotiation process, indexing was left out, meaning the $9.00 an hour we reach in 2016 will be around for as long as it takes lawmakers to make another change.

Last year’s compromise also failed to provide an increase in the minimum wage for most tipped workers.  Employees in food services remain at $5.00 an hour while service employees remain at $5.65 an hour.  These workers are forced to rely on tips – an unreliable source of income – just to help them reach the minimum wage.  The deal required the Governor to convene a wage board to settle on an increase for tipped workers.  So far, that board has not been convened. In California and six other states, tipped workers receive the same minimum wage as all other workers. 

New York City is Unique

A higher minimum wage, adjustments each year for inflation, tipped workers earning an equal minimum wage– these are the policies that New York City should enact, as opposed to merely following the tepid lead of the state legislature.  But first, we will need to be granted the authority from the State to set our own minimum wage policy.

The argument for New York City being able to set its own minimum wage is fairly straightforward.  The cost of living in New York City is much higher than it is in rest of the state.  New York City is an incredibly unique city and the economic policy considerations that apply to so many other places are different here.  So why should we be beholden to state lawmakers when assessing the value we place on the work of our low-wage workers.

Mayor de Blasio won election in a landslide on a clear platform of addressing the massive and rising economic inequality that is plaguing our city.  State lawmakers should let the mayor do what is necessary for him to fulfill his campaign promises.

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