Raising the minimum wage is either an urgent, overdue step to lift the standard of living for low-paid workers or a threat to small businesses’ ability to grow, depending on who is speaking.
Both sides in the debate are trying to rally support amid proposals to raise the state and federal minimum wage to $9 an hour, from $7.25, and to automatically tie future increases to inflation.
Both Gov. Andrew M. Cuomo and President Obama have backed increasing the minimum wage. Monday, the Coalition for Economic Justice, State Sen. Timothy M. Kennedy, D-Buffalo, and various advocacy groups and unions said an increase is needed to bring low-wage earners above the federal poverty line.
“It is time to raise the minimum wage to benefit our workers, stimulate our economy and strengthen our communities,” Micaela Shapiro-Shellaby, organizing director of the Coalition for Economic Justice, said at a rally on Franklin Street in downtown Buffalo.
Some state lawmakers want to increase the minimum wage to $9 an hour starting in January 2014. Their proposal also would link the minimum wage to the cost-of-living increases starting in 2015 “so we don’t have to have this conversation every nine years,” Kennedy said. That approach also would help businesses plan for incremental increases, he said.
Someone earning the minimum wage and working 40 hours per week makes $290 before taxes, Kennedy said. “They’re forced oftentimes to rely on safety net programs and other public subsidies just to make ends meet, to feed their families,” he said.
Betty J. Martin, president of the Transportation Aides of Buffalo, said an increase in the minimum wage is needed to keep pace with the cost of living.
“Everything is going up, from groceries to gas, and not our paychecks,” she said. “We have people who are working out here for this city who are not even able to get their medicine, cannot go to the doctor’s [office], cannot get hospital appointments because they are told even though they make minimum wage, they make too much money to get Medicaid, they make too much money to get food stamps, and they have no other resources.”
Meanwhile, a coalition of business groups, including the National Federation of Independent Business, says a minimum-wage increase would hurt small businesses and the state’s economy. They say that businesses are already struggling with burdensome taxes and regulations and that a minimum-wage increase would only add to their pressure in a stagnant economy.
“Small businesses operate on very thin margins,” Michael P. Durant, state director for the NFIB, said in a statement. “Raising the minimum wage on small businesses that can’t afford it will result in fewer small businesses, fewer jobs and a slower state economy.”
Heather C. Briccetti, president and CEO of the Business Council of New York State, says such an increase would force employers to compensate by cutting workers’ jobs or hours, raising prices, deferring investments or reducing profits.
There is even some debate in the business community on the issue: For instance, the group Business for a Fair Minimum Wage has called for raising the pay rate to at least $8.75 an hour and adjusting it annually for the cost of living.
Nineteen states plus Washington, D.C., have a minimum wage that is higher than the federal and New York State minimum wage, according to the state Department of Labor. Cuomo has advocated an $8.75-an-hour state minimum wage that is not indexed to inflation, while Obama has called for a $9-an-hour federal rate that is indexed to inflation.
The coalition of business groups opposed to increasing the minimum wage sees higher costs resulting for employers. Jeffrey Keller of the Northeastern Retail Lumber Association contends that small businesses that already pay $2 to $3 more per hour than the minimum wage will be pressured to raise their workers’ wages, as well.
But James Wagner of Local 1122, Communications Workers of America, says an increase would instead enhance workers’ spending power. “People that go to work every day earning minimum wage or less than a living wage, they’re not in a position where they can save money, where they can put it over into the Cayman Islands,” he said. “They spend the money in our community. These are the people who keep the community alive.”