Hundreds of employees working for the City of Buffalo and some private companies will see an increase in their minimum wage hourly rate — known as the living wage.
The Common Council unanimously approved Tuesday a single-rate increase, to $15.38, for city employees and 28 private companies that do business with the city and are covered by the living wage law.
The living wage law is applicable to companies that contract with the city for at least $50,000 and have at least 10 employees, according to Niagara Council Member David A. Rivera, who co-sponsored the resolution with Delaware Council Member Joel P. Feroleto to increase the minimum wage hourly rate.
The new living wage is based on 150 percent of the 2019 federal poverty guidelines for annual income for a family of three, said Sam Magavern, volunteer attorney for the city's Living Wage Commission, which studied the issue late last year.
The current formula for establishing a living wage is a split rate, depending on whether the employer provides health care or not, Magavern said.
The current wage is $12.04 if health insurance is provided and $13.52 if no health insurance is provided.
"Now it's just going to be one single rate" of $15.38 for all covered workers, Magavern said.
"The current rate just isn't really enough to lift people out of poverty. This new rate is going to make a little difference in helping lift families out of poverty, some of our lowest paid City of Buffalo workers and then workers for companies that contract with the city," he added. "Folks like that doing really important work need a family-sustaining wage."
The new wage will go into effect July 1, 2020, to give the city time to appropriate money in the 2020-21 budget, Rivera said.
The date gives businesses time to adjust to the new figures, according to the commission.
The commission concluded that a single higher rate is easier to administer and more beneficial to workers without imposing significant costs on employers.
For example, a single full-time worker with two children who earns $15 an hour would — depending on individual circumstances — qualify for Medicaid or an essential plan program with New York State.
Buffalo first passed a living wage ordinance in 1999 based on calculations made by an economist from Buffalo State, according to the commission's December report.
The law set the 2000 living wage rate at $6.22 for employees with health benefits and $7.22 for workers without. The law provided for increases in 2001 and 2002, and for a reevaluation at the end of 2002. City lawmakers set new rates for 2003 and 2004 at $9.03 for employees with health benefits and $10.15 for workers without, which remained in effect until 2007 — when the city raised the rate to $9.59 and $10.77, and added an automatic cost of living increase in future years.