State legislators have agreed to increase the state's minimum wage in steps to $7.15 by January 2007. The state's minimum was would increase to $6 per hour next January, to $6.75 per hour in January 2006, and to $7.15 per hour a year later.
The Business Council and most employer groups statewide opposed the bill, arguing that it would actually hurt the lower-wage earners it supposedly seeks to help and that the minimum-wage issue should be debated and decided nationally in Washington, DC.
The nonpartisan Employment Policies Institute (EPI) in Washingotn, DC, immediately blasted the bill.
"The majority of the benefits from a minimum wage hike do not go to poor families, and . . . a majority of the working poor will receive no benefit from the proposed increase," the Employment Policies Institute (EPI) of Washington, D.C. said in a release criticizing the bill.
The EPI cited recent research by Richard Burkhauser of Cornell University which showed that:
- Only
14 percent of the benefits from the wage hike will go to
poor families. "Even more disturbing, over 60 percent of
minimum-wage employees in poverty will receive no benefit
from the originally proposed increase to $7.10 an hour,"
EPI's release said.
- The
proposed wage hike would cost New York employers and consumers
$880 million a year. Of this, only $122 million would go
to poor families, while $528 million would go to families
earning more than twice the poverty line.
- The job loss resulting from a minimum wage hike is concentrated on the least-skilled and most vulnerable employees. For example, increasing the minimum wage causes four times more employment loss for employees without a high school diploma and African-American young adults than it does for their more educated and non-black counterparts.
"The especially poor targeting of this social program makes it a highly inefficient and ineffective means of combating poverty," EPI said.
"The failure to reach these poor families makes the minimum wage a failed anti-poverty policy," said Craig Garthwaite, research director for EPI. He also called the agreement "a classic example of politics trumping good policy."