In the course of the debate about raising the minimum wage in New York State, it has sometimes been said that since wages are much lower in upstate areas that a phased-in $15 minimum wage is untenable there. However, this argument is made using overall median wage levels that are subject to distortion by the presence of a large number of high-wage jobs in the downstate area. When an upstate-downstate comparison is made using wages on a detailed occupational basis for the low-wage occupations (like retail salespersons, cashiers or stock clerks) that would be affected by a higher minimum wage, the pattern shows a fairly high degree of uniformity in wage levels across New York State.
The Governor’s FY17 Budget Article 13 increases the minimum wage to $10.10 next year and expands the state earned income tax credit from 12.5 percent to 15 percent of the federal credit (the Governor indicated an interest in further expanding the EITC pending available resources following the mid-year revenue forecast). Senator Goldin and Representative Slater have each introduced bills (S 2156 and H 7347) to further increase the EITC to 20 percent of the federal credit. Lawmakers have made real progress in these two areas over the past several years and future process to raise the labor and living standards of our workers going forward is well warranted.
As an alternative to the Governor’s proposed phased increase in the state’s minimum wage to $15 by 2019 in New York City and by mid-2021 outside of New York City, Assemblyman Brian Kolb recently proposed to increase the state’s Earned Income Tax Credit (EITC) from 30% to 45% of the Federal EITC. The bill memorandum in support of his proposed legislation states: “Expanding the EITC is a much better alternative because it would put more money in the
taxpayers’ pockets, boost the economy and create employment opportunities for the unemployed.”
While the state’s EITC is a beneficial program for working people receiving low- and moderate wages and should be enhanced, for several reasons, it is not a substitute for increasing the state’s minimum wage. In fact, it does not even come close.
Among all sectors, retail trade has the most low-wage workers in New York State. Over a half million (555,200) retail workers will benefit from an increase in the statewide minimum wage to $15 an hour. These workers make up nearly a fifth (18 percent) of the 3.2 million workers receiving a wage boost, although retail jobs represent one in nine of all New York jobs. With the phased-in $15 minimum wage floor, 61 percent of all women retail workers would receive higher wages, as would 55 percent of all men retail workers. Retail workers are overwhelmingly adults (91 percent), only 9 percent are teenagers. Fifty-three percent of the retail workers who would benefit are white, non-Hispanic, and 47 percent are persons of color. Of all African-American retail workers, 62 percent would receive a wage increase, as would 65 percent of all Latino retail workers. More than one-quarter (27 percent) of all retail workers are parents struggling to raise families on very low wages. Over half of all retail workers (53 percent) who would benefit from an increase in the minimum wage receive some form of public assistance because their retail wages are so low. Median hourly pay for New York’s retail workers has fallen by 7-9 percent since 2002, adjusted for inflation, this is far greater than the 1 percent decline in the overall median wage.