With focus on income inequality, Albany bill will seek $8.50 minimum wage

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The New York Times
By: John Eligon
January 30, 2012

With focus on income inequality, Albany bill will seek $8.50 minimum wage

The Occupy Wall Street encampment at Zuccotti Park is no more, but the focus it brought to income inequality is having an impact in Albany and beyond.

The Assembly speaker, Sheldon Silver, a Manhattan Democrat, plans to introduce a bill on Monday to raise the state's minimum wage to $8.50 an hour, a 17 percent increase. The bill also calls for the minimum wage to be adjusted each year for inflation.

Mr. Silver's action follows similar steps by lawmakers across the country: Delaware recently passed a minimum wage increase, and raises are being considered in California, Connecticut, Hawaii, Illinois, Maryland, Massachusetts, Missouri and New Jersey.

And Mr. Silver's proposal comes just days after President Obama, in his State of the Union address, described the growing gap between the rich and the poor as the ''defining issue of our time.''

The New York proposal, which Mr. Silver said would be his top legislative priority this year, will be subject to close scrutiny from Senate Republicans and business leaders, who say the measure could hurt job growth. But Mayor Michael R. Bloomberg, a political independent with strong ties to the business community, has supported Mr. Silver's call for an increase in the minimum wage.

''It is impossible to live in this city on $15,000 a year,'' said Micah C. Lasher, Mr. Bloomberg's director of state legislative affairs.

Gov. Andrew M. Cuomo has said that he is generally in favor of a minimum wage increase, but that he will have to see the speaker's proposal before deciding whether to support it. Mr. Cuomo, a Democrat, has enjoyed strong support from the business community, but has also been under pressure from the liberal wing of his party to demonstrate concern for the poor.

The state's current minimum wage of $7.25 an hour, which is lower than that of 18 states and the District of Columbia, took effect three years ago as the result of a federal law. The State Legislature last approved a minimum wage increase eight years ago.

The neighboring state with the highest minimum wage is Vermont, at $8.46. In Massachusetts it is $8, and in Connecticut it is $8.25.

For Mr. Silver, the minimum wage proposal is one element of a broader agenda, including a tax cut for families making less than $30,000 per year, that he said he hoped would begin to address inequality issues.

''When you work full time at the minimum wage, you are poor in New York,'' Mr. Silver said in an interview. ''You're not making enough to get by. We want to have people able to support their families, plain and simple.''

Mr. Silver, who is sponsoring the measure with Assemblyman Keith L. T. Wright, also a Manhattan Democrat, estimated that the increase would benefit one million New Yorkers -- those making less than the proposed amount, and others making slightly more, whose salaries would be adjusted to keep them above the minimum wage.

Supporters say that a minimum wage increase could help bring low-income families out of poverty, stimulate economic growth and spur job creation.

''The Occupy movement shone a light on inequality,'' said Dan Cantor, the executive director of the Working Families Party. ''Raising the minimum wage is a modest but real step in balancing the scales.''

But opponents say it could hurt low-income earners and small businesses, by raising the cost of doing business, which could lead to layoffs.

''The national minimum wage went up, and in the United States of America the economy's the worst it's been since the Great Depression,'' said Senator Tom Libous, a Binghamton Republican. Mr. Libous said he was skeptical of studies suggesting that increasing the minimum wage spurs economic growth.

''I think that's a lame theory that doesn't amount to much,'' he said.

Mr. Silver's proposal may not go far enough for advocates who have called for an even higher minimum wage. Had the national minimum wage kept pace with inflation over the past 40 years, it would be at $10.39 now, according to the National Employment Law Project.

Mr. Silver's proposal ''is a good start, but really is not enough for New York's cost of living and New York's economy,'' said Paul Sonn, the legal co-director at the project.

The Fiscal Policy Institute, which has been supportive of minimum wage increases, argues that people who earn the minimum wage tend to spend all the additional money they receive, which pumps money into the economy. The extra spending will create jobs and benefit the mom-and-pop shops that opponents of an increase say will be most hurt by a higher minimum wage, said James A. Parrott, the chief economist at the institute.

''They're going to be spending more money in local communities, where they live,'' Mr. Parrott said.

But, citing a 2008 study by professors at American University and Cornell, Russell Sykes, a senior fellow at the Empire Center for New York State Policy, said that increasing the minimum wage even to $8.25 could result in a loss of tens of thousands of jobs.

''When you begin to take people who are lower-skilled and require the business to pay them more, they make decisions of a different nature that can lead to job loss,'' Mr. Sykes said. ''It prices less-skilled workers out of the market.''

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This page contains a single entry by CFED published on January 30, 2012 4:12 PM.

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