Gov. Cuomo still plans to hike minimum wage despite pandemic economic stress
Despite a brutal COVID-19 recession and thousands of New York small businesses shutting their doors forever, Governor Cuomo is moving ahead with a minimum wage increase in the suburbs and upstate on Dec. 31st. The minimum wage in New York City for companies with ten or fewer workers is already at a maximum of $15 an hour under state law.
The raise by the Labor Department boosts the minimum wage from $13 to $14 in Long Island and Westchester County and from $11.80 per hour to $12.50 upstate.
This is happening under the auspices of a 2016 state law that will phase in a minimum wage increase from $14 to $15 in the suburbs at the end of 2021.
Conservatives are incensed by the move and its timing. Business advocates and Republican lawmakers are calling for a pause due to the pandemic hammering businesses, forcing retailers and eateries to close. But Cuomo is ignoring their pleas and moving forward with the hike regardless of the economy and its dire straits.
“The wage increases upstate and on Long Island are another kick in the teeth to small service-sector employers—restaurants, personal-care businesses, retail outlets—that have been especially hard hit by the restrictions imposed under Governor Cuomo’s New York State on PAUSE orders,” said E.J. McMahon, a fiscal analyst with the Empire Center for Public Policy.
“Even supporters (in normal times) of minimum wage hikes acknowledge they have a ripple effect up the wage scale, so their impact (and cost) isn’t limited to the lowest-page employees,” he said.
The state Department of Labor cited a budget division report that found unemployment decreased as the minimum wage increased before the COVID-19 pandemic.
In a press release on Wednesday, the state Department of Labor hotly defended the increase, claiming Long Island and Westchester labor markets are “leading New York’s economic recovery from the downturn caused by the global pandemic.”
But many are asking, “What recovery?” Especially since there is a possible shutdown coming in January on top of everything else.
After the state Department of Labor’s announcement, Rob Ortt criticized the decision as “extremely short-sighted” and claimed the state “has done nothing to help” small businesses during the pandemic.
“The last thing they need is additional costs at this time, and the last thing they want is to pink slip dedicated employees for Christmas,” Ortt said. “But instead of pausing this increase as the Senate Republican Conference urged until the end of the pandemic, the state will now force these small employers to make difficult choices. The state wrongly based their decision on pre-pandemic economic success.”
The Department of Labor also said low-wage workers who are disproportionately impacted by the pandemic’s economic toll could use the bump in hourly wages.
Minimum wage hikes are a source of heated debate in good economic times. But during a COVID recession, they are unthinkable to most Americans.
But in New York, that is not the logic used. And how businesses already failing can afford the wage increase is unknown.
“Even as we continue to battle the pandemic, we are working to build back in an equitable and just way,” Labor Commissioner Roberta Reardon said.
“Before this crisis, we achieved record low unemployment rates while increasing the minimum wage — improving the lives of thousands of New Yorkers — and we will rebuild our economy while continuing to lead the nation in the fight for economic justice. This investment in our workers once again proves that in New York we believe a fair day’s work deserves a fair day’s pay.”
The Long Island/Westchester county regional unemployment rate has fallen from its April peak of 15.9 percent to 7.1 percent in October, while the remainder of upstate has fallen from its 15.4 percent to 6.8 percent during the same time period.
Greg Biryla, New York director of the National Federation of Independent Business, said the Cuomo administration’s reasoning for approving the minimum wage hike “defies logic.”
Restaurants, bars, and small businesses of all kinds have been battered by the pandemic, he said.
“New York state needs to do everything in its power to ensure economic conditions do improve for small businesses, the jobs they create, and the communities they support – starting with a delay of this scheduled wage hike,” Biryla said Wednesday.
New York’s non-essential businesses may be forced to close again in January if the state doesn’t clamp down on escalating coronavirus cases, which have soared in recent weeks to record levels not seen since the spring, Gov. Andrew Cuomo said Wednesday.
“Of course a shutdown in January is possible,” Cuomo said at a press conference in Albany. “But there’s a big but,” he said, spelling the word out one letter at a time “B-U-T.”
Cuomo didn’t say what a second shutdown would look like. He imposed another ban on indoor dining in New York City on Monday but said he wants to keep public schools open and he hasn’t yet decided on whether to shut down non-essential businesses.
“It is up to us. What will happen in three weeks? What will happen in four weeks? You tell me what you’re going to do over the next three weeks or four weeks, and I’ll tell you what’s going to happen,” he said.