As state legislators in New York deliberate on a bill to raise the New York minimum wage even higher statewide, Governor Kathy Hochul has weighed in on the debate.
Hochul announced during her 2023 State of the State address that not only should wages rise in the Big Apple, but should be tied to inflation across the state. Yet looking at the Empire State’s history of mandates, minimum wage hikes have roughly doubled the growth rate of inflation over the last two decades.
In a recent New York State Division of Budget report on the minimum wage, the Hochul administration recommends tying the statewide minimum wage to the U.S. consumer price index. Data from U.S. and New York labor departments shows New York’s minimum wage rates have climbed 98% from 2000 to 2022, despite inflation rising only 54% during this period. Had the statewide minimum wage increased from its $5.15 per hour rate in 2000 based on inflation, it would be roughly $8.75 an hour today.
One proposal currently up for deliberation in New York has made headlines for proposing a $21.25 minimum wage for New York City, but also hikes the mandated wage floor across the state to as high as $20 per hour by 2026. This represents a 142% increase in the minimum wage over the last few decades.
By using inflation as a weapon to further raise mandates on employers, lawmakers are ignoring the real harms steep wage hikes can have on employees themselves. These consequences are acutely felt in the state’s restaurant industry, which characteristically employs a majority of minimum wage-earners.
Economists overwhelmingly agree that minimum wage hikes cause employment and earnings losses for employees, and steep wage hikes up to $15 per hour have already spelled disaster for New York City.
Over a series of minimum wage hikes to reach New York City’s current $15 per hour mandate, the city’s restaurant industry experienced declining employment growth, and even lost 3% of full-service restaurant employment from 2017 to 2019. Recent data shows the $15 wage mandate is restricting the Big Apple’s economic recovery from pandemic struggles, and a recent state comptroller report indicates the jobless rate of 16-24 year olds in New York City is more than double the national average – and nearly a quarter of men in this age group looking for jobs cannot find one.
New Yorkers don’t need to bring the pain being felt in its largest city to the entire state.