New York State Agrees to $15 Minimum Wage Plan
Path to $15 for All Regions of the State Under Tiered Plan
Agreement Would Mean Big Raises for Close to 1 in 3 Workers, Reversing Years of Falling Pay
Follows California Deal to Raise the Wage to $15 Statewide
New York, NY – Three years after a few brave workers in New York City first went on strike launching the Fight for $15, New York lawmakers today approved a plan to raise the state minimum wage to $15. Under the tiered agreement, the minimum wage would reach $15 in New York City by December 2018 (and one year later for very small businesses), and in suburban Long Island and Westchester County by December 2021. In Upstate New York, the wage would rise to $12.50 by December 2020, and then be increased each year until it reaches $15, based on a formula to be determined by the state Department of Budget.
Earlier this week, California lawmakers reached a similar agreement to raise the minimum wage to $15 statewide by 2022.
“Governor Cuomo deserves tremendous credit for delivering a path to a $15 minimum wage for workers statewide and the largest wage increase in New York history,” said Christine Owens, executive director of the National Employment Law Project. “Together with the landmark $15 win this week in California, the New York $15 plan shows how the Fight for $15 launched by underpaid workers has changed the nation’s economic trajectory, beginning to reverse decades of wage inequality.”
Governor Cuomo had proposed raising the wage in upstate New York to $15 by 2021 – a date by which cost-of-living data show even single workers in Buffalo, Syracuse and the North Country will need at least a $15 wage just to cover the basics. But the Republican-controlled State Senate cut that raise down to $12.50 by 2021, and forced upstate workers to wait years more before getting to $15.
“While the upstate increase is slower than what workers need and what the governor fought for, the fact that $12.50 has become the compromise position for minimum wage opponents highlights how dramatically the Fight for $15 has shifted the whole debate around wages,” said Owens.
“Once phased in, close to one in three working New Yorkers – nearly three million in total – would receive raises of more than $4,000 per year,” Owens continued. “For a home health aide or a waitress who struggles to get by on $15,000 per year, that’s the difference between near poverty and a life with less stress and more dignity.”
Sixty-one percent of New York’s workers who earn less than $15 per hour – 1.9 million in total – are located in New York City and its suburbs, where the minimum wage would increase to $15 more rapidly. Thirty-nine percent – or 1.2 million – are located in upstate New York, where the wage would increase more gradually.
This week’s action in New York and California marks the rapid acceleration of the Fight for $15, launched by striking fast-food workers in New York City in late 2012. Between New York and California, more than nine million workers will receive raises to $15 per hour, and 18 percent of the U.S. workforce will now be covered by a $15 minimum wage.
The U.S. economy has tilted so far towards low-paying jobs that today 42 percent of America’s workers earn less than $15 per hour.
Other states and cities are expected to follow New York and California’s lead. Leaders in the District of Columbia, Massachusetts and New Jersey have announced plans to move $15 minimum wages. And similar legislation has been introduced in Connecticut and other states and cities.
The typical worker who will receive a raise under New York’s $15 minimum wage is a woman over 25 years old who works full time and provides on average half her household’s income. Thirty percent have associate or bachelor’s degrees, and half have some college experience.
State-of-the-art economic of modeling of Governor Cuomo’s $15 minimum wage proposal by University of California-Berkeley researchers shows that these broad benefits for workers are achievable with little adverse impact on jobs. One of the key dynamics documented by the new research is that, unlike small wage increases, a $15 minimum wage generates billions of dollars in new consumer spending, especially in low-income communities, which boosts sales and offsets the higher costs to businesses.
Seventy-five economists have endorsed the new research, and another 200 economists back a $15 minimum wage nationwide. Nobel prize-winning economist Paul Krugman has said that “there’s absolutely no reason to think that a fifteen dollar minimum wage will be a problem for New York.”
Small business groups, including the Brooklyn Chamber of Commerce, the Greater New York Chamber of Commerce, the Northeast Organic Farmers Association of New York, and the Long Island African American Chamber of Commerce – which collectively represent more than 32,000 small employers in the state – endorsed Governor Cuomo’s $15 minimum wage proposal.
The experiences of the first jurisdictions phasing their minimum wages up to $15 have been positive. In Seattle, the first major city to adopt a $15 wage, the region’s unemployment rate hit an eight-year low of 3.6 percent in August 2015, significantly lower than the state unemployment rate of 5.3 percent, following the initial wage increase in April. In a front-page story titled, “Apocalypse Not: $15 and the Cuts that Never Came,” the Puget Sound Business Journal reported on “the minimum wage meltdown that never happened,” explaining that Seattle’s restaurant industry has continued to expand and thrive as the $15 wage phases in. King County, where Seattle is located, is on track to break last year’s record for the number of business permits issued to food service establishments.
Over the past three years, nine U.S. cities and counties, including Los Angeles, San Francisco and Seattle, have approved $15 minimum wages; New York has approved a $15 minimum wage for fast-food workers, and Massachusetts has for Medicaid-funded home care workers.