Klein: Minimum Wage Hike Good For Business; Business Group: No, It’s Not
By Jon Campbell Gannett News Service April 02, 2012
A new report featuring analysis from a Washington D.C. think tank found that an increase in New York’s minimum wage could result in an economic boost, but at least one business group is already pushing back.
The study, which was released Sunday by Sen. Jeff Klein, D-Bronx, and based on analysis from the Economic Policy Institute, found that raising the hourly minimum wage to $8.50 from $7.25 would infuse $600 million in the state’s economy, which would result in a net of 4,800 new jobs.
Assembly Speaker Sheldon Silver, D-Manhattan, has made a minimum wage hike one of his conference’s top priorities for the 2012 session. He’s sponsored a bill to increase the wage to $8.50 and index it to inflation; Klein sponsors the bill in the Senate.
“This report shows that money in the pockets of minimum wage earners ultimately means a greater demand for additional jobs,” Klein said in a statement. “Raising the minimum wage is not only the right thing to do for the thousands of New Yorkers who are struggling to make ends meet every week, it also benefits New York State as a whole.”
The state chapter of the National Federation of Independent Business, however, is skeptical, to say the least. Mike Durant, the group’s state director, said the study is based on a “highly dubious assumption” that increasing pay for low-wage workers will offset the hit to their employers.
“First, it falsely assumes that for employers, this money is discretionary, like it’s sitting in an account somewhere collecting interest,” Durant said in a statement Monday. “That’s nonsense. That money is dedicated to other business expense, including wages. So if you raise the minimum wage, you’re forcing employers to cut back on something else, including wages for new jobs or work hours for existing employees.”