New York Governor Andrew Cuomo has joined the $15 minimum wage bandwagon and if he gets his way, it could bankrupt the state and New York City. That’s not considering what it will do to businesses of all sizes, many of which will be forced to either lay off workers or close their doors.
Gov. Cuomo’s proposal is to raise the minimum wage to $15 an hour for all entry-level employees. The increase would take effect in New York City by 2018 and for the state in 2021.
The Empire Center for Public Policy analyzed the impact it would have on the budgets for the state and for New York City. In their report, they stated:
“A pay bump to $15 an hour would boost personnel costs by $25 million for the state’s executive branches, and by $39 million for New York City.”
E.J. McMahon, an analyst with Empire Center, added that those figures are only the tip of the iceberg since they only looked at hourly and seasonal employees but not at full-time state employees who are currently making less than $15 an hour. There are currently more than 15,000 state employees earning less than $15 an hour. McMahon said that when everyone is included, raising the minimum wage to $15 an hour would raise the cost to hundreds of millions of dollars and someone has to pay for it.
McMahon has a valid point about asking who’s going to pay for the increased wages. In 2014, the state of New York was facing a $17 billion deficit. New York City has a deficit of $1.8 billion and Mayor Bill de Blasio is already putting forth a budget plan of $78.3 billion. Raising the minimum wage to $15 an hour will only add to the deficit and give both Democratic leaders the itch to increase taxes.
New Yorkers will be asked to pay for the wage increase with higher taxes and cost of living. The state labor commission has already approved a minimum wage increase to $15 for fast food workers, which means the price of a Big Mac or Whopper will also increase.
In other places in the nation that have instituted minimum wage increases have already seen the negative impacts. Cost of food and other goods increased in proportion to the wage increase so in the long run, those workers who get paid more aren’t really gaining anything and others that already make more than the minimum wage have to pay more for their food and goods without experiencing any increase in income.
The bottom line is that forced minimum wage increases to $15 an hour will have far more negative impacts to everyone and the economy than it helps those making minimum wage.