The down-to-the-wire effort to undercut Gov. Andrew Cuomo’s push for a $15 minimum wage on the grounds that it would cost some poor workers their jobs ignores the fact that there is a relatively painless alternative to shoving the cost onto businesses: Shove it onto the rest of us.
After all, amid the national debate over inequality, a society constantly preaching the value of work should be willing to make sure that work is valuable – even if that means paying a few cents more for a Big Mac or a Whopper.
After last year putting New York’s fast-food workers on a long glide path toward $15 an hour statewide by 2021, Cuomo’s effort to get a budget deal that now raises the earnings floor for all workers is being undermined by Republican efforts to extract business tax breaks on the dubious grounds that shop owners will eat the cost of the increase while also slashing payrolls. But research shows that doesn’t have to be the case.
A study last year by Purdue University, for instance, found that raising fast-food workers’ wages to $15 an hour would hike prices by only 4.3 percent.
Such analyses follow the 1990s work of two Princeton University researchers who looked at the fast-food industry in New Jersey, which raised its minimum wage, and in neighboring Pennsylvania, which did not. They found “no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” They also found that fast-food prices rose in New Jersey, “suggesting that much of the burden of the minimum-wage rise was passed on to consumers.”
In other words, rather than downtrodden small-business owners absorbing the cost while landing on bankruptcy’s doorstep, they just spread the cost over their customer base.
Critics also forget to include savings that can result from higher wages that reduce employee turnover. For example, a University of Massachusetts Amherst study last year concluded that a $15 minimum wage would cut turnover by 24 percent and yield the industry $5.2 billion in savings. So much for driving owners out of business. And the same principles surely apply across the rest of the low-wage economy.
But despite such evidence, State Senate Republicans wouldn’t miss an opportunity to exploit the situation as the budget clock ticks toward midnight. In exchange for a minimum wage that would let workers support themselves, they demand small-business tax breaks and lower workers’ compensation and unemployment costs.
Oh, and they also want to drag out the phased increase as long as possible, exempt as many workers as possible, put in a bunch of circuit breakers along the way, and perhaps stop well short of $15. Other than that, they’re all for it.
They, of course, have their own studies documenting calamitous layoffs when wages rise. But when you put aside the dueling think tanks, it comes down to one bottom-line question: What kind of society do we want to be?
In fact, given the savings from lower turnover, the boost to the economy and the minimal price hikes, it’s clear that the real issue has never been the impact on jobs. It’s equally clear that the diluted mess of a wage hike likely to be in the final package won’t be there because of economic necessity.
It will be there because Republicans used the state’s poorest workers as hostages to win a ransom for their base.