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Minimum Wage Hikes Should Come With Some Regulatory Relief For Businesses, Too

State Labor Commissioner Roberta Reardon says a $1 an hour minimum wage increase for much of New York state to $14.20 an hour helps businesses and workers.

We’re not so sure.

The idea behind doing so is pretty simple — when things cost more, increase how much money workers at the lowest end of the pay scale bring home. That’s certainly Reardon’s logic this year. The Labor Department says an average of 200,000 New Yorkers in these upstate counties will benefit from this wage increase, 44% of which are full time workers and of those, nearly 25% are supporting children below age 18.

But will increasing the minimum wage really help those people escape poverty? History says maybe — but not as much as Reardon would have you believe.

In 2016, the minimum wage was $9 an hour in New York. Since then, it’s increased each year before reaching $13.20 an hour this year — a 46.6% increase. Poverty has decreased, too, but not by nearly as much. The 2013-17 U.S. Census Bureau American Community Survey pegged poverty in Chautauqua County at 18.5%, while the most recent census data shows a 14.8% poverty rate — or a decrease of 25%. So poverty is decreasing some, but it comes at a cost. And there’s no direct sign pointing to the minimum wage for that. Many companies have already been increasing wages to attract workers before the state’s most recent proposed minimum wage increase.

In our view increasing the minimum wage would put more money in people’s pockets. It could also put more people out of work if companies are forced to make cuts. A higher minimum wage may decrease poverty rates, but also mean fewer businesses to employ people.

We’re not making a case that the state shouldn’t try to help low-income workers. Inflation is hurting everyone. But it would be nice if the state’s action to help low-wage workers came with some help to businesses that are facing the same pressures the low-wage workers are facing — higher worker’s compensation costs, higher unemployment insurance costs, higher energy costs, higher labor costs and higher costs for the materials needed to do whatever job is being done. At least when the state mandated a 40-hour work week for farm workers it came with a tax credit to offset the increasing cost of labor.

What about the rest of us?

Starting at $3.50/week.

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