Following renewed interest in a proposal to raise the minimum wage in New York, the New York Post attacked the measure as a job killer, despite significant research indicating no substantial link between job losses and wage increases. In fact, studies show the proposed minimum wage increase would benefit New York workers.
Democrats have been seeking a 17% hike in the minimum wage, to $8.50 from $7.25, for a while. [Republican Senator Dean] Skelos and his fellow Republicans, who've controlled the Senate for the past two years, have blocked it.
Yet on Tuesday, the [National Federation of Independent Business] painted a sobering picture of what such a hike would do: Besides killing 22,000 jobs, some $2.5 billion in economic output would vaporize.
"Raising the minimum wage," said Mike Durant, the NFIB's New York director, "will affect the smallest businesses that can least afford higher labor costs, and they'll respond by finding ways to reduce or limit the number of jobs they create."
Depending on inflation, the group says, costs for entry-level workers would soar by as much as 66% by 2022 -- "more than many small businesses can handle."
Some 70% of the lost jobs would come from small businesses, the very engine of job creation.
The Post's assertion that small businesses would be most affected is dubious. Most workers in New York who make minimum wage are employed by larger chains, not by small businesses. According to testimony by National Employment Law Project Staff Attorney Tsedeye Gebreselassie:
Despite misconceptions, the majority of low-wage workers are, in fact, employed by large chains, not small mom-and-pop businesses. Two-thirds of all employees work in firms of at least 100 workers (and half of all employees work in firms with more than 500 workers).
In addition, the larger companies are already paying their workers less and are therefore likely to have to increase wages for their employees in light of a new minimum wage policy. A Fiscal Policy Institute study found that New York retail employers with over 500 workers paid their workers 25 percent less on average than smaller retail employers. As for the claim of massive job losses, another study by the Fiscal Policy Institute found that job growth for small businesses actually grew faster in states with higher minimum wages.
In fact, numerous studies have shown that historically, unemployment is not linked to an increase in minimum wage. A Fiscal Policy Institute study conducted after New York increased their minimum wage in 2004 found that over the next three years, "total employment in the state [had] grown by 3.0 percent." A National Employment Law Project study found that even during times of economic downturn, increases in the minimum wage did not lead to job losses among teens -- part of a group of people the Post has previously targeted as being most affected by a minimum wage increase.
Despite the fearmongering over job losses and slowed economic output, a minimum wage increase would actually have a substantial positive impact on New York workers. Raising the minimum wage would benefit about one million workers in the state, which is just over 11 percent of all New York workers. In addition, it would bring its minimum wage closer to other states in the Northeast such as Connecticut, Massachusetts, and Vermont -- all which have a higher minimum wage than New York.
Unfortunately, this attack on minimum wage is not new for the Post. Earlier this year the Post editorial board wrote a similarly misinformed piece about minimum wage increases in New York.