What's New

Zack Hutchins
Director of Communications

July 15, 2004

New York City business groups take different stands on proposals to hike state's minimum wage

Two prominent New York City-based business groups have staked out different positions on proposals to significantly increase the state's minimum wage.

The New York City Partnership, a city-based group of business leaders, has endorsed an increase in the state's minimum wage to $7.10 an hour. A Partnership spokesman said the group supports increasing the wage statewide, not just in New York City or cities of a certain size.

"Our decision is based on the fact that New York's competitive position in the world economy is driven, more than anything else, by the outstanding quality of our labor force," Kathryn S. Wylde, president and CEO of the New York City Partnership, said in a letter to Senate Majority Leader Joseph Bruno that was quoted in the July 15 issue of the New York Times.

But the Manhattan Chamber of Commerce, which represents mostly small and mid-sized employers, said today it strongly opposes proposals to significantly increase the minimum wage.

"Manhattan alone has more than 120,000 employers with between one and nine employees," said Nancy Ploeger, president of the Manhattan Chamber. "A government-mandated increase in costs of doing business, like this proposed increase in the minimum wager, would definitely affect their bottom lines.

"We want entrepreneurs to want to build businesses in Manhattan. If government keeps imposing higher costs with proposals like this, we just won't be able to attract them."

She cited a July 9 commentary in the Wall Street Journal that documented the fallout of the decision of Santa Fe, New Mexico, to require all businesses with more than 25 employees to pay at least $8.50 an hour—a wage that is set to increase to $10.50 an hour by 2008.

"The Santa Fe Chamber of Commerce says it's already heard of eight businesses canceling plans to move to, or expand in, the city," the Journal reported. "The real wages of this policy, as everywhere it's been imposed, will be fewer lower-income workers with jobs."

The state Senate is expected to return to Albany next week, and it is widely expected that it will consider a proposal to increase the minimum wage to $7.25 an hour. The state Assembly has already passed a bill that would do that.

Earlier this month, a new study by Cornell University researchers concluded that a big jump in the minimum wage would only reduce employment opportunities for entry-level workers, especially lower-skill workers that the minimum-wage increase is supposedly intended to help.

That study, which was commissioned by the Employment Policies Institute (EPI) and released July 1, also showed that most of the benefits from such an increase would not go to poor families. A longer summary of the Cornell researchers' study is available at www.bcnys.org/whatsnew/2004/0714mwage.htm.

The Business Council has long argued that the minimum wage should be set in Washington, D.C., not in 50 different state capitals.