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Raise the Wage NY

March 23, 2023

Memorandum In Support of the Raise the Wage Act S1978 (Ramos)/A2204 (Joyner) January 2023

SEIU Local 200United enthusiastically submits this memorandum in support of the Raise the Wage Act, S1978 (Ramos)/A2204 (Joyner). This legislation is essential to building prosperity for everyone in New York – particularly for communities upstate. The Raise the Wage Act would go a long way towards restoring New York’s disjointed and depreciated minimum wage – moving it to at least $21.25 by 2027 and then indexing it to adjust automatically and according to inflation and worker productivity each year in the future. Raising and indexing the minimum wage is a necessary step towards fixing New York’s broken labor market, and addressing the skyrocketing cost of living in communities all across our state.

In 2016, New York led the nation in passing the first $15 minimum wage, which resulted in historic reductions in pay inequality and poverty across the state. Unfortunately, when it comes to general workers in upstate, the idea that New Yorkers enjoy a minimum wage of $15/hour is a false narrative. Although most workers downstate have benefitted from a $15/hour minimum wage from as early as 2018, general workers upstate in 2023 have only just reached $14.20/hour and have no current guarantee of reaching $15/hour. This is particularly concerning given recent and excessive inflation, coupled with the fact that upstate the fast food minimum wage alone is $15/hour. This puts state funded industries, like human services, at a clear disadvantage in a climate where it is already incredibly difficult to recruit and retain staff, let alone quality staff.

Even in regions of our state where the minimum wage has been $15/hour for almost half a decade, the stalled out minimum wage has presented a clear problem. The frozen minimum wage came at the worst possible time, coinciding with the highest inflation seen in 40 years. The value of New York’s minimum wage has already plummeted 15% and every week is falling farther and farther behind what workers need. $15/hour just isn’t enough anymore – anywhere in NY – as the prices of groceries, gas, and housing continue to climb unrestricted.

The Raise the Wage Act is urgently needed to restore the state’s minimum wage by raising it to the level where it would have been if it had been consistently updated each year since 2019, to keep up with both rising prices and worker productivity increases. That translates to raising the wage to $21.25 downstate and $20 upstate by 2026. Additionally, if we’d like to avoid similar general worker hardship in the future, after restoring New York’s minimum wage it is vital that we index it moving forward – which means providing for automatic annual increases as 19 other states already do - so that it doesn’t erode gain.

We are encouraged by Governor Kathy Hochul’s inclusion of indexing the state’s minimum wage in her 2023-2024 priorities. Unfortunately, our Governor’s proposal is only part of the solution that New York’s working families need and deserve. While the Governor’s proposal would prevent New York’s minimum wage from being further eroded by inflation, it unfortunately does nothing to address the fact that $15 an hour is no longer a fair or reasonable wage for workers anywhere in our state, even in regions where it has yet to be reached. Indexing the minimum wage without first raising it fails to reverse the huge loss in value that the minimum wage has undergone in recent years. Simply indexing the $15 minimum wage from where it is would lock in poverty wages for the future. New York can, and should, do better.

To put a finer point on it, the Governor’s proposal would likely result in very small raises of $0.40 to $.60 cents an hour each year – translating to about $670 more each year by 2026 for an average worker. That’s just $13 more a week and doesn’t begin to make a dent in the spiraling costs families are facing. By contrast the Raise the Wage Act would deliver raises of about $3,300 a year by 2026. That’s five times larger than the Governor’s proposal, and translates to $63 a week more – enough to actually begin to cover the increase in the cost of groceries for a family. Moreover, the Governor’s proposal would raise pay for just 1 in 8 New Yorkers or 1.1 million workers. The Raise the Wage Act would raise pay for 1 in 3 or 2.9 million New Yorkers, and so would reach far more of the families who really need help. In its size and impact, the Raise the Wage Act is similar to New York’s historic $15 minimum wage – which made a tremendous difference for many of the state’s families. It’s the type of response working New Yorkers need right now if they’re going to weather the current cost-of-living crisis.

Study after study has shown that the $15 minimum wage hasn’t hurt job growth in the state or caused jobs to leave for neighboring states. Researchers from the New York Federal Reserve Bank, the New School, and the University of California have all confirmed this when studying the impact of New York’s last minimum wage increase. Higher wages have helped neighborhood businesses by giving consumers more money to spend, which they have overwhelmingly spent locally. Furthermore, the Raise the Wage Act begins to address historic inequities experienced by consistently marginalized populations in that women and workers of color would benefit the most. 70% of workers who would receive raises are Black, Latinx or Asian. 55% are women. 1 in 4 are parents supporting young children. New polling shows that raising the minimum wage one of the most popular issues in the state for voters, and something they want the legislature to act on. New polling by Data for Progress shows that raising the Raise the Wage Act’s proposal to raise the wage to at least $21.25 by 2027 is even more popular than the $15 minimum wage was with 80% of New Yorkers backing it, including 65% of Republicans and large majorities in every region of the state.

SEIU Local 200United submits this memorandum in support for S1978/A2204 and strongly urges its swift passage in the Senate and Assembly, to restore New York’s minimum wage and ensure that it never falls behind again.