As inflation has surged, other cities have vaulted past New York’s $15 minimum wage, considered a trailblazer only a few years ago.
By Patrick McGeehan
Nov. 14, 2022 - The New York Times
When New York City’s minimum wage first reached $15 nearly four years ago, New York was at the forefront of the movement to raise living standards for workers in the fast-food industry and other low-paying sectors. But in recent months, as the costs of rent, groceries and utilities have surged, the minimum wage in a growing list of cities, including Washington, Los Angeles and Denver, has vaulted past.
New York, unlike those cities, did not link its minimum wage to the rate of inflation. As the cost of living rises across the country, workers earning the lowest wages in the nation’s biggest city are seeing their incomes steadily reduced in real terms.
Since New York raised its minimum wage to $15 an hour for most workers at the end of 2018, the buying power of that wage has fallen by about 15 percent, according to James A. Parrott, director for economic and fiscal policy at the Center for New York City Affairs at the New School. Those workers have effectively been set back four years to the days when their minimum wage was $13 an hour, he said.
The power to set a minimum wage for all workers in New York City lies with the State Legislature. Attempts by Democrats in Albany to change state law to start adjusting the city’s minimum wage for inflation have so far failed to overcome opposition from business groups that object to the additional mandates.
Mr. Parrott said that if New York State does not act soon to raise the city’s minimum wage, it is likely to fall further behind other cities as the cost of living continues to rise. “The fact that rents have gone up so much faster than incomes everywhere is going to add to pressure for places that haven’t adopted a higher minimum wage to do that,” he said.
The trend of rising minimum wages is largely confined to states and cities where Democrats hold sway. But on Tuesday, voters in Nebraska approved a measure to gradually raise their state’s minimum wage from $9 to $15 by 2026. There are 20 states ・including Pennsylvania, Georgia and Texas ・that have not set a low wage higher than the federal minimum, which has been $7.25 an hour since 2009.
In cities that adjust for inflation, the minimum wages are rising fast. In July, Washington’s rose by 90 cents to $16.10 an hour. In January, Seattle and Denver are scheduled to increase theirs by $1.42, based on local inflation rates. Those raises will lift Seattle’s minimum wage to $18.69 an hour and Denver’s to $17.29. In Los Angeles, inflation added more than $1 to the local minimum wage in July, boosting it to $16.04 an hour.
Gabriela Garcia, a housekeeper who shares a room in Brooklyn with her two children, said her hourly wage of $15 no longer allowed her to buy the chicken breasts and cookies her young son craved. Ms. Garcia, 47, said a friend in Seattle earns $25 an hour for similar work and had advised her to move across the country for better pay.
“Housekeeping in general is not an easy job,” she said in Spanish, through an interpreter. “It’s a job that will leave you very exhausted.”
Ms. Garcia said she hoped that New York would raise its minimum wage to at least $20 an hour soon, so she no longer had to ask herself, “Do I put food on the table or do I pay my rent?”
A decade ago, New York was on the front lines of a brewing movement to improve the circumstances of low-wage workers. The campaign, known as the “Fight for 15,” began in 2012 when workers walked out of dozens of food-service businesses in the city, demanding to be paid $15 an hour and be allowed to form a union.
Those demands sounded fanciful at first, but with the backing of powerful labor unions like the New York Hotel and Gaming Trades Council and the Service Employees International Union, they spurred a proposal to raise the minimum hourly wage for most workers in the city from $9 to $15 in just three years.
“The $15 minimum wage was a bold, significant step in getting closer to a living wage,” said Paul K. Sonn, state policy program director at the National Employment Law Project, which supports low-wage workers. But now, he added, “the highest inflation in 40 years is causing New York’s minimum wage to fall far, far behind.”
Consumer prices have risen this year at a painful pace that many Amerit cans have never experienced. The official national rate of inflation for the 12 months through September was 8.2 percent. For the New York metropolitan area, it was lower ・6.2 percent ・largely because the high cost of gasoline has less impact on city dwellers.
Employers’ costs are rising, and they generally would object to any mandatory wage increases for that reason, said Ken Pokalsky, vice president of the Business Council of New York State. Mr. Pokalsky said an increase would be counterproductive because “it hits most directly in sectors like hospitality that are still facing challenges in recovering” from the effects of the pandemic.
He added that many low-wage jobs had already been replaced by machines and further hikes would spur more automation. “Something’s got to give,” he said.
In New York City, the minimum wage for most workers has not changed since Dec. 31, 2018, when it reached $15 after three annual increases of $2 each.
For workers like Alexchayanne Diaz-Larui, who labors over the grill at a Chipotle restaurant in Midtown Manhattan, those mandatory annual raises of $2 an hour are a distant memory. Now, he said, his best hope is an increase of 25 cents an hour every six months from Chipotle.
“We all know that the cost of living, food, everything is going up faster than what we can get raise-wise,” Mr. Diaz-Larui said.
He puts in three six-hour shifts a week at Chipotle and earns $18.10 an hour, after a small raise last spring, he said. “You do the math. That’s not a livable wage.”
Mr. Diaz-Larui, 44, said the minimum wage in New York should be raised to at least $20 an hour and indexed to inflation. He noted that the child-support payments he makes to the mother of his two teenage children are subject to cost-of-living adjustments.
New York policymakers were not averse to factoring inflation into the minimum wage when they passed the law mandating the increase to $15 in 2016 ・but only for upstate areas, where the minimum wage was scheduled to rise more gradually because the cost of living was lower.
Three suburban counties ・Nassau, Suffolk and Westchester ・arrived at a $15 minimum wage at the end of 2021 with no further increases scheduled. But the rest of the state is still on a path to $15 that is set by factoring in inflation and gains in worker productivity.
In early October, the state’s Department of Labor announced that the minimum wage upstate would rise by $1 on Dec. 31 to $14.20 an hour.
New York City has set wages for specific types of work, as the Taxi and Limousine Commission did when it required the biggest ride-hailing apps, including Uber and Lyft, to pay drivers a minimum amount for each trip, which is pegged to inflation.
In February, Mayor Eric Adams announced that those rates would rise by 5.3 percent. “This is about respect and paying each one of these individuals a fair and decent wage,” he said then.
Asked for Mr. Adams’s position on the citywide minimum wage, Charles Lutvak, a spokesman for the mayor said, “We look forward to working with our colleagues in Albany this legislative session to seriously consider raising the minimum wage while also recognizing that still-struggling small businesses may need financial help if they’ll be asked to pay workers more.”
Some Democratic state lawmakers have proposed raising the minimum wage significantly in New York City and the rest of the state. Jessica Ramos, a state senator from Queens, plans to reintroduce a bill that she sponsored in the last legislative session that would raise the minimum wage in the city and surrounding suburbs to $21.25 an hour by 2026 and the wage for the rest of the state to $20. From there, each minimum wage would adjust annually to account for inflation.
“Our minimum wage has fallen out of phase with the cost of living,” Ms. Ramos said. “It’s not fair to leave New Yorkers behind.”
Ms. Ramos said she did not yet know if the measure would receive support from Gov. Kathy Hochul, who was recently elected to her first full term in office. A spokeswoman for the governor pointed out that the state had announced the impending increase in the upstate minimum wage but declined to comment on the effort to raise the city’s minimum wage.