Reckless & Radical
Cuomo’s minimum-wage folly
NEW York has seldom seen an executive initiative as politically radical or economically reckless as Gov. Cuomo’s proposal for a $15perhour statewide minimum wage.
The radicalism, at least, appears calculated. Cuomo aims to become the first governor to impose on an entire state what Bernie Sanders can only dream of enacting nationally.
As for economic consequences — well, like Vermont’s socialist senator, Cuomo simply insists they’ll be nothing but positive.
Cuomo’s “Drive for $15” — as emblazoned on the giant RV in which he’s begun touring the state — is propelled by emotional sloganeering and laborunion cash. But the governor’s case for a $15 minimum wage — to be fully effective by the end of 2018 in New York City and mid2021 in the rest of the state — relies on misinformation and halftruths.
For example, Cuomo repeatedly claims his proposal isn’t unprecedented. “If you took the minimum wage in the 1970s and just indexed it to inflation . . . you come out to our proposal for $15 today,” he says.
Wrong. Adjusted to inflation, New York’s minimum wage briefly peaked in 1970 at the 2015 equivalent of $11.30.
Including that early ’70s spike, New York’s inflationadjusted minimum wage over the past 60 years has averaged about $8.50 an hour. The current statewide $9 minimum is New York’s highest in 37 years.
Cuomo has said employers oppose a $15 minimum wage because it would mean “less profit, less profit, less profit.” However, governmentsubsidized nonprofit groups across the state — for example, those running workshops for the developmentally disabled — also are expressing alarm over the massive new costs this policy would impose on them.
So far, the governor isn’t lifting a finger to help nonprofits. Doing so, especially with his tightly capped state budget, would only mean more spending, more spending, more spending.
Notwithstanding Cuomo’s strident rhetoric, a big jump in the minimum wage could significantly reduce job opportunities for inexperienced, unskilled workers hoping to climb out of poverty — the very people it’s supposed to help. That’s why some of the nation’s most prominent Democratic economists, including former senior advisors to President Obama, have pointedly refused to endorse Sanders’ call for a $15 national minimum.
Even economists supporting a low doubledigit federal minimum wage have questioned the wisdom of foisting uniformly higher minimums on regional labor markets with widely differing wages and living costs — exactly the situation now in New York, where the me
dian hourly wage for all jobs in some upstate regions isn’t far above $15, compared to nearly $22 in the New York City metro area.
So a strong case can be made against Cuomo’s position — yet state Senate Republicans have avoided taking any position of their own. With both the governor and Assembly Democrats pressing for $15 as part of the fiscal 2017 state budget due for adoption by April 1, Senate Majority Leader John Flanagan apparently hopes for a backroom deal on something less, although he has no visible strategy for accomplishing it.
At this point, the best hope for compromise would be to revisit the Fair Local Wage Act, first introduced in 2014 by Sen. Diane Savino (DSI). It would allow New York City and individual counties to set their own minimum wages up to 30 percent higher than the basic state level.
Cuomo himself embraced a more regionally sensitive approach as recently as a year ago, when his fiscal 2016 budget called for an $11.50 minimum in the city and a $10.50 in the rest of the state.
Savino’s bill could be tweaked to give New York City and counties the leeway to boost their local minimums to as much as $15 over phasein periods of six and 10 years, respectively. At the same time, however, jurisdictions voting to raise their wages should be required to make up the wage difference for nonprofit humanservices providers.
Given a choice, Mayor de Blasio would no doubt opt for $15, and some downstate suburbs might follow suit. In upstate New York, however, most counties probably would stand pat at $9.
Cuomo’s drive for $15 threatens to run over the economic aspirations of many lowwage workers and struggling upstate regions alike. It’s time for more sensible voices, on both sides of the Senate aisle, to slow this bus down.