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Advocates say minimum wage needs to be higher before it’s indexed to inflation

This stock photo shows a sign calling for an increase in the minimum wage at a rally.
Mr Doomits
Adobe Stock
This stock photo shows a sign calling for an increase in the minimum wage at a rally.

The state’s joint legislative fiscal committees will hold a hearing Wednesday on Gov. Kathy Hochul’s budget concerning workforce issues.

Part of the testimony will focus on her proposal to link New York’s minimum wage to the inflation rate — a plan that advocates say falls short.

It would permanently index the minimum wage to the yearly rate of inflation and begin with a minimum wage of $15 an hour, which is the rate in New York City and for fast-food workers statewide.

Advocates, including many of the state’s major labor unions and anti-poverty groups, say that starting wage is “seriously inadequate” to meet the needs of workers who are struggling to pay for necessities and who are “crushed by skyrocketing prices.”

Paul Sonn of the National Employment Law Project said the minimum wage should first be gradually increased to $21.25 an hour between now and 2027.

“That’s the level that the $15 wage would have reached by then if it had kept up with inflation and worker productivity growth,” Sonn said.

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Sonn said under Hochul’s proposal, the $15 minimum wage, indexed to inflation, would rise by just 40 cents an hour. Add that up, and you have barely enough to buy a sandwich in New York, he said.

“And it’s far too little to make a dent in the spiraling costs that families are facing,” Sonn said.

Alease Annan, a part-time worker for UPS, said she’s considered an essential worker who helped keep things running during the pandemic. She said she was born in New York City; she loves it and wants to stay. But it’s one of the most expensive cities in the world, and she works two jobs just to survive.

“Gas has gone up, food has gone up, rent has gone up,” Annam said. “But wages have stayed the same. That’s really unsustainable.”

Sen. Jessica Ramos sponsors the bill to phase in the $21.25 minimum wage, and then adjust it to the inflation rate each year. She said because of inflation, the $15 hourly wage is worth closer to $12 an hour.

“Further than that, the state should not be in the business of codifying poverty wages,” Ramos said.

Ramos said there’s a “great disparity in wealth” between the state’s estimated 120 billionaires and the rest of the people. She said it’s also a time when corporate profits are at an “all-time high.”

Advocates said there’s another flaw in the governor’s plan: The yearly annual increase for inflation would be capped at 3%, even if inflation is higher than that. The U.S. Department of Labor reported that inflation from January 2022 to January 2023 was 6.4%.

Michael Kink with the Strong Economy for All Coalition said there’s momentum in the Democratic-led state Assembly and Senate to adopt the higher minimum wage proposal. He said the measure to begin adjusting for inflation at $21.25 an hour has gained multiple sponsors, including the chairs of the labor committees in both houses.

“We feel really good about the array of sponsors,” Kink said. “There are moderate Democrats, conservative Democrats.”

Kink hopes to see the proposal included in the Senate and Assembly budget plans, which are due out in mid-March.

The state’s business leaders, including the Business Council, prefer Hochul’s plan.

Karen DeWitt is Capitol Bureau chief for the New York Public News Network, composed of a dozen newsrooms across the state. She has covered state government and politics for the network since 1990.