Living Wage

$8.50 Minimum Wage Is too Low to Help NYS Workers

Hunger Action Network said that the $8.50 minimum wage proposed by Assembly Speaker Sheldon Silver is not enough to deal with the problem of income inequality in New York or to help jumpstart the state's moribund economy.

The Assembly proposal is $1 less per hour than the minimum wage bill expected to be introduced in Congress by the Democrats this spring. During the 2008 presidential campaign, President Obama endorsed raising the federal minimum wage to $9.50 by 2011 and then indexing it based on the Consumer Price Index.

Neighboring Connecticut is expected to raise its present $8.25 minimum wage to $9.25-$9.50 by 2014.  "We appreciate Speaker Silver's leadership in putting the state minimum wage on the table, and recognize that he is trying to be politically realistic in pushing for a smaller increase. But sometimes you need to push for what is right and change the political dynamics, as we saw with the Occupy movement and the millionaires tax. $8.50 is simply is not enough in a state with much higher living costs than the national average and for a state which has the worst income inequality in the country," noted Mark Dunlea, Executive Director of Hunger Action Network of New York State.

Hunger Action called upon Governor Cuomo to show leadership in pushing for at least $10 an hour, and making sure that any deal includes indexing to inflation (e.g., tied to 50% of the average hourly wage). Past agreements to raise the state minimum wage have dropped indexing at the last moment.

Raising the state minimum wage to $8.50 an hour would still leave it below its historical standard of raising a full time worker with 2 dependents to the federal poverty level. To provide an income equal to the federal poverty level of $18,530 for a family of three would require $8.90 an hour.

If the minimum wage had kept pace with inflation over the last 40 years, today it would about $10.80 per hour.
A hike in the minimum wage is one of the most effective steps the state can take to address the income inequality crisis in the state, which has gotten much worse in recent decades as the minimum wage has stagnated. In 1973, the richest 1% of Americans had 9% of the nation’s income. In NYS the richest 1% have 35% of the state's income. Average wages are 7% percent lower today, adjusted for inflation, than they were in 1973.

A recent survey by the Public Religion Research Institute found that 67 percent of respondents favor hiking the minimum wage to $10 an hour. Even a majority of Republicans -- 51 percent -- favor the higher minimum wage.
Raising the state minimum wage of course increases taxes revenues while pumping more money into the economy. The Economic Policy Institute estimates raising the minimum wage to $9.50 by 2011 as Obama proposed would have generated $60 billion in new consumer spending across the country.

An economic recession is a good time to raise the minimum wage. The federal minimum wage was enacted during the Great Depression to promote economic recovery. You can't build a strong economy on poverty wages. When the federal minimum wage was established in 1938, the unemployment rate was still a very high 19 percent. President Franklin Roosevelt called the minimum wage an essential part of economic recovery. It would put a floor under worker wages, alleviate the hardship of inadequate wages, and stimulate the economy and job creation by increasing consumer purchasing power.

Research, by the Center for Economic and Policy Research found that San Francisco’s minimum wage jump to $8.50 in 2004 - well above the state minimum of $6.75 - improved low-wage workers’ incomes and did not kill jobs. An even bigger jump in Santa Fe, N.M., the same year - from $5.15 to $8.50 - had a similar effect. Other studies have found that hikes in the minimum wage actually increases employment, both reducing the rate of turnover in low-wage jobs and increasing consumer demand.


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