NY Gov. Kathy Hochul’s Minimum Wage Plan Meets Resistance (1)

Several Democratic New York state lawmakers, unions, and worker advocates on Thursday pushed back on Gov. Kathy Hochul’s plan to tie the minimum wage to inflation, saying the proposal is inadequate for struggling low-income workers and the rate should be eventually boosted by to over $21per hour statewide.

Business groups conversely say they’re against any raise while employers continue to recover from the pandemic. New York’s minimum wage downstate is $15 per hour and it’s $14.20 for upstate workers.

The minimum wage fight will test the moderate Democrat governor’s ability to push her own priorities while working with an increasingly progressive arm of the legislature and a veto-proof Democratic supermajority in both houses. Last month, Hochul was dealt a public blow after a key Senate committee rejected her nominee to head the state’s highest court. New York lawmakers also are attempting to keep up with similar wage efforts in other progressive states.

“There’s no middle ground,” state Sen. Jessica Ramos (D), who chairs the chamber’s labor committee, told reporters at a Thursday news conference.

“There is only one way that we can help working families at this moment,” she said, adding that Hochul’s proposal only equates to an extra $13 a week. “The state should not be in the business of codifying poverty wages.”

Hochul’s budget proposal released Wednesday would cap minimum wage increases to 3% annually or the growth in the year-over-year Consumer Price Index rate for urban and clerical workers for the Northeast, whichever is less. The indexing would apply to New York City, Long Island, and Westchester County starting Dec. 31, and for the rest of the state after the minimum wage hits $15 per hour under the current inflation and productivity-based formula.

With inflation increasing the cost of everything from home heating to groceries, a coalition of state lawmakers, community groups, worker advocates, and unions—known as “Raise Up NY”—are rallying around a bill sponsored by Ramos and Assemblymember Latoya Joyner (D) that would increase the minimum wage to $21.25 per hour by 2027 and then tie it to an indexed formula.

The push has gained traction among Democratic lawmakers. Assembly Speaker Carl Heastie (D) has said he supports raising the minimum wage and that his fellow Democrats are generally supportive of such efforts. Senate Democrats have “always been supportive of raising the minimum wage and certainly tying it to inflation makes sense,” majority spokesman Mike Murphy said Thursday.

The state Senate and Assembly will release their budget proposals in the coming weeks, which are expected to address a minimum wage hike. The deadline for lawmakers and Hochul to agree on and pass a state budget is March 31.

Dueling Proposals

New York and California have been national leaders on the minimum wage issue, passing legislation in 2016 to push their state’s hourly minimum to $15.00 for most workers.

But at least three states and more than 50 cities now have exceeded that level. California will reach $15.50 per hour next year and voters in the next election will decide whether to raise it to $18.00. Washington state is at $15.74 per hour. Hawaii is set to raise its hourly minimum to $18.00 by 2028.

Hochul’s plan would provide about 900,000 workers with an average annual increase of $670, compared to the Ramos-Joyner bill that would help 2.9 million workers earn an average annual increase of $3,300, according to the Raise Up NY coalition.

“Governor Hochul’s minimum wage proposal is a start but it doesn’t go nearly far enough,” Joyner, who chairs the Assembly labor committee, said in a statement. Purchasing power has eroded as prices rise with inflation, putting increased pressure on working families and low-income workers, she said. “Increasingly trapped in a cycle that pushes them further down the economic ladder and into poverty – minimum wage workers need and deserve action.”

Hochul’s proposal includes provisions that suspend raises under certain circumstances. For example, a freeze would occur if the state unemployment rate increases by 0.5% or if employment levels drop for one month, which happens often, said Paul Sonn, state policy program director at the National Employment Law Project and a coalition member. “This would ensure that minimum wage doesn’t even keep up with inflation,” he said at the news conference. “In many years, it wouldn’t even increase at all.”

‘A Major Issue’

Business groups say Hochul’s proposal could have significant cost increases for employers.

The executive budget proposes “expansive minimum wage mandates as small businesses continue to weather persistent inflation and historic energy costs,” Ashley Ranslow, New York state director for the National Federation of Independent Business, said in a statement Wednesday. The group represents 11,000 small businesses in the state.

Ranslow also noted that Hochul’s plan doesn’t propose money for the state’s more than $8.1 billion pandemic-era federal unemployment insurance loan. Not paying that money back to the federal government affects small businesses in particular, who pay thousands of dollars more in taxes and fees. A minimum wage hike would compound the problem, the groups say.

“This is a major issue on the table right now,” Ken Pokalsky, vice president of government affairs for the Business Council of New York State, said in an interview.

Hochul’s plan is more “workable” for employers than the Ramos-Joyner bill pending in the legislature, he said.

“We’re generally opposed to wage mandates,” Pokalsky said, but indexing is “definitely more gradual and frankly it becomes somewhat more predictable too.”