Minimized: New York Sells Out Upstate on Minimum Wage

By Andrew Pragacz

Once again, the economic and political elites of New York have sold out Upstate workers.  The much anticipated raise in the minimum wage to $15 per hour for all workers in the State was sacrificed in this year’s state budget dealing.  While Downstate will see the full increase after inflation, the minimum wage in upstate will only reach $11 (2016 dollars) by 2022.  This extraordinarily modest “growth” in the minimum wage does nothing to address Upstate’s flailing economy, rooted in low-incomes, job insecurity, and inequality.  A $2 raise over six years is not going to help families decrease the poverty rate, nor prevent the continued outflow of the area’s young people.  By appearing to address the concerns of low-income workers but in reality doing very little to raise incomes, the political status quo in Upstate and New York as a whole is preserved: Upstate and Downstate workers are once again divided and persistent job insecurity will keep workers clamoring for even the most precarious jobs.  Furthermore, the minimum-wage as a topic of political contestation will be pushed aside at least until 2022, or so the 1% hope.

The Real Wage

While national newspapers and State officials lauded the phased-in $15 an hour minimum wage within New York State, few acknowledged that 40% of affected workers in New York State will not be seeing $15 any time soon. This plan divides New York into three zones, each with its own minimum wage schedules.  Upstaters can expect the minimum wage to creep up $.70 a year until 2022 when it reaches $12.50.  After accounting for inflation, however, the minimum wage in 2016 dollars will only just barely crest $11.00.  The phase in is so slow that Inflation will eat 40% of the so-called increase.  After 2022 the law permits incremental, yearly increases to $15, but the language is sufficiently vague to give political and economic elites veto power over any further increases.  In the accompanying graph you can see how inflation will eat away at the wage’s purchasing power.

Upstate Needs at least $15

Upstate is in desperate need of $15 minimum wage.  The rationale for a lower wage floor in upstate cites  is the lower cost of living and a depressed economy.  A move to $15 would under these circumstances, so they argue, be disastrous and result in further job loss and misery.  The numbers and independent analyses tell a different story.

First, workers affected by the raise are concentrated in retail, restaurants, healthcare, and social assistance.  Across the state, these industries pay about the same, whether they work in New York City or Upstate. Facts suggest that these industry wages are not tied to the local cost of living, but are reflective of a standardized minimum wage and employer power. These sectors rely disproportionately on women workers.

Second, even if places like Binghamton had a $15 minimum wage, it would not be enough.  By 2021 a single adult without children in the Binghamton area (Broome plus Tioga County) will need an hourly wage of $16.27 and full time hours just to cover the basics (in 2016 that number is $14.28).

Third, an independent study conducted by the Center on Wage and Employment Dynamics found that for New York businesses as a whole a raise to $15 bumps payroll only slightly, by 3.3%.  It also concluded that businesses will experience positive impacts from lower turnover and higher productivity.  They further note that no jobs will be lost as a result.  Extra money in the pockets of those most likely to spend it will be a boon for the economy.

Fourth, all working class  New Yorkers–Upstaters and Downstaters alike– have not had a real raise in two generations.  From 1979 to 2012, the bottom 99% experienced only an 8% income increase, while the top 1% saw a 307%.  Since the “recovery” from the Great Recession beginning in 2010, wages for 60% of income earners has fallen in New York State.

Why the compromise?

If none of the negative effects of a $15 minimum wage in upstate prophesied by opponents have any basis in fact, why the compromise? Why did upstate get sold out?  The simplest answer is the institutionalized two party system in New York State.  While it’s commonly assumed that Upstaters are more conservative, a majority think a $15 minimum wage is a good idea.  Although the vast majority of Upstate elected officials are Republicans, this has much more to do with how Upstaters think and feel, than with how district lines are drawn to maintain the status quo.  Democrats have been just as complicit in keeping the New York State Senate Republican as is the Republican Party.

The only way for Upstate to get its due is to first break with the two party charade and second to come together outside election cycles.  Only an independent worker’s movement supporting independent working class candidates can push a pro-worker upstate agenda.

 

                            Inflation Will Eat 40% of the Minimum Wage Increase in Upstate

 

Year Proposed Min.

Wage ($/hr.)

Real Min. Wage         Accounting for Inflation
2016 $9.00 $9.00
2017 $9.70 $9.50
2018 $10.40 $9.90
2019 $11.10 $10.30
2020 $11.80 $10.70
2021 $12.50 $11.10
Total Increase $3.50 $2.10

 

 

 

 

 

 

 

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