Minimum Wage Increase Coming To New York

Increasing the minimum wage has been one of the hottest topics that is sweeping across the United States. Many people believe that increasing the minimum wage would help eliminate poverty and bridge the economic gap between the poor and the middle class.

In New York, Governor Andrew Cuomo tried to raise the minimum wage in New York City from $8.50-$11.50 per hour. This minimum wage increase was not passed by the New York Legislature. Cuomo is now going to take a page out of President Obama’s playbook and bypass the Legislature in order to get his minimum wage increase to become law.

Governor Cuomo has asked New York’s labor commissioner to find out just how much the minimum wage should be increased. Once the minimum wage recommendations are made, they will take effect. They will not need to be approved by the New York Legislature.

Did you all see what happened?

Governor Cuomo did not ask his labor commissioner to conduct a study to find out if the minimum wage should be increased. Cuomo has asked how much the minimum wage should be increased. See the difference?

The focus of the minimum wage increase has been around the fast food industry. Governor Cuomo made a statement about the wage disparity in this industry.

“Nowhere is the income gap more extreme and obnoxious than in the fast-food industry….The average fast-food C.E.O. made $23.8 million in 2013…Meanwhile, entry-level food-service workers in New York State earn, on average, $16,920 per year.”

Are people really naive enough to believe that by raising the minimum wage that it will be a miracle cure for poverty?

If a large minimum wage increase does happen then business owners will have to figure out ways to either increase sales or cut costs to justify this new expense. They will do this by raising prices that the consumer has to pay or they will simply just cut jobs.

Seattle was one of the first cities to try this minimum wage experiment. Experts predicted that we would see job losses and the employers coming up with a way to increase prices to justify paying such a high price for minimum wage staff.

So what is happening in Seattle? Businesses are being forced to close and people are losing jobs. They are also finding that customers are not buying as much due to an increase in prices.

Minimum wage increases sound great. Everyone wants to make more money. The problem is that you can’t just raise the minimum wage without raising prices elsewhere. An economy does not work that way.

[Image via Kim Kulish/Corbis]