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Raising Minimum Wage


Bill A05132 has once again passed the New York State Assembly. This Bill would raise minimum wage from $5.15 to $6.75 per hour with an annual cost of living increase.

I have mixed emotions on this issue. I do agree that minimum wage keeps most fellow New Yorker at or below the poverty level, and each worker deserves a chance to escape that factor. However, recent trends prove that when the minimum wage increases, repercussions follow.

One repercussion of course is the raising of prices by business to reflect an equalization point in their profit level. In other words, if an employer has three employees whom he now must pay an additional $64.00 per week, he is going to have to find a way to meet this expenditure and still stay at the same profit level he was at prior to the increase. The most logical means of accomplishment is to increase prices. Another avenue the business owner may choose to follow would be to cut employees to meet the expenditure. This would mean for every four employees that the business has, one would be dismissed. Of course there are other options, such as employers who pay minimum wage and commission, the employer could just simply cut the commission level.

So how can we be fair to both the employee and the employer? While nothing is simple, I would say the following scenario is probably the most effective.

First, to assure the employees will be protected from loosing their jobs in regards to the wage increase, legislation must be enacted against the at-will doctrine. Second, increase minimum wage by a cost of living index. In layman's terms, if the cost of living has raised 10% since the last minimum wage increase, increase the minimum wage in accordance to that cost. If I were an employer, I would probably be able to find a way to calibrate a 10% increase in minimum wage more easily than I could a $1.60 per hour raise.

I am interested in reader feedback on this issue. I am also interested in feedback from our Assembly members. I am forwarding requests to three randomly selected Assemblymen who voted affirmatively for this Bill, and three randomly selected Assemblymen who voted negatively on this Bill. I am hoping to secure a better look at the issue via their feedback.

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This Page Last Updated 5/15/2002
C 2002 L Munro