The City Should Set Its Own Minimum Wage

David R. Jones, The Urban Agenda

If it were up to conservative politicians and low-wage employers, there would be no minimum wage and workers would take whatever salaries corporations gave them or lump it.  Fortunately for America’s workers, minimum wage legislation was adopted in 1938 as part of F.D.R.’s New Deal.  Of course, it took the Great Depression to get minimum wage instituted.  And it has been a source of political controversy ever since.

There is a caricature of low-wage workers – that most of them are teenagers working part time at the local Dairy Queen.  As is often the case with a stereotype, that’s nowhere near the truth.  Most low-wage workers work full time.  They are adults earning half their household income.  Their average age is 35.  These are people washing dishes in restaurant kitchens, cleaning hotel rooms, washing cars.   

In New York City, the overwhelming majority of low-wage workers are blacks, Latinos, and immigrants.  These workers are increasing in number because of the devastating effects of the recent recession, when many people lost good-paying jobs and were forced to settle for low-wage employment.

Stuck in Congress

There was an attempt in Congress to raise the federal minimum wage from $7.25 an hour to $10.10 by 2016.  It is stuck in the gridlock that has come to characterize Washington politics.  If it ever is adopted, it would help nearly 28 million low-wage workers earn a little more on the job.  But don’t hold your breath.

While Congress dithers, a number of states have taken action and raised their minimum wage above the federal minimum.  In fact, Connecticut recently passed legislation to raise its minimum to $10.10 by 2017.  Here in New York, the state’s minimum rose to $8.00 an hour on January 1, going up to $9.00 at the beginning of 2016. 

At $8.00 an hour, that’s about $16,000 yearly wage for someone working a 40 hour week.  How can a family in New York City survive on that wage?  Oh, yes, they still might be able to get food stamps before Congress cuts the funding for food stamps again.  

There is a direct link between low-wage jobs and homelessness in this city with its shrinking amount of affordable housing.  There are homeless New Yorkers who leave shelters every day and go to work.  But they can’t make enough money to afford an apartment.  There is a social cost which the business sector – with its ability to stymie living wages - has been shifting onto the backs of taxpayers.

Many states that raised their minimum above the federal level also index it to inflation.  Not New York.  Without this, the minimum wage loses some of its value every year.  This is why there are constant attempts to raise it.

When Bill de Blasio ran for mayor, his campaign highlighted the extent of economic inequality in the city.  Now in office, he has set himself the task of raising the wages and benefits of low-wage workers.  It won’t be easy.   

The mayor wants to raise the minimum wage in New York City.  To accomplish this, however, he has to get the approval of the state Legislature.  Once more, life in the city is governed by Albany politicians.  Governor Cuomo almost immediately rejected the mayor’s proposal, providing only illogical reasoning for his position. 

New York would hardly be the first city to set its own minimum wage.  San Francisco’s minimum is now $10.74 and is tied to the consumer price index.  Seattle plans to pay its city workers a minimum of $15 an hour, with the possibility of extending that wage to all workers.

It is imperative that New York City be granted the authority to set its own minimum wage.  The cost of living in the city is a great deal higher than in the rest of the state.  Indeed, cost of living is a major factor in individual states increasing the minimum above the federal level.  It should equally apply to the vast differences in the cost of living between the city and upstate.

States Taking Action

President Obama, realizing that Congress is unlikely to raise the federal minimum, has been encouraging the states to raise the minimum on their own.  Since January 2013, seven states – including California, New Jersey, West Virginia, and Rhode Island - and Washington, D.C., have raised their minimum wage.  There are ballot referendums in other states to increase the minimum wage.

Increasing the minimum wage will give low-income families more disposable funds, almost all of which they will spend in the local economy.  This increase in consumer spending will, in turn, spur job growth. 

The main argument that opponents of raising the minimum wage have is that it will kill jobs.  Over the years, the effects of minimum wage increases have been studied extensively.  This research has shown that minimum wage increases have resulted in few job losses.  This is quite evident, since unemployment figures have not increased when the minimum wage is raised – whether nationally or in individual states. 

Over and above the economic argument for raising the minimum wage, there is an ethical argument.  What it comes down to is this: No one who works full time should have to live in poverty.

Issues Covered

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