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EDITORIAL: With minimum wage, aim for the sweet spot

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Minimum Wage

Activists cheer July 22 during a rally after the New York Wage Board endorsed a proposal to set a $15 minimum wage for workers at fast-food restaurants with 30 or more locations in New York.

The minimum wage is generally acknowledged to be a good thing, and like any good thing, you can have too much of it.

The federal minimum wage stands at $7.25 an hour, which is low by historical standards when you consider that the 1968 minimum wage of $1.60 an hour would be worth $10.90 an hour now.

The minimum wage hovered at a value of $9 or $10 an hour through the 1960s and ‘70s — a prosperous time in the U.S. — until it stalled in 1981 with the election of Ronald Reagan as president.

The minimum wage was not raised again until 1990, after Reagan had left office. A 30 percent increase in the federal minimum now — from $7.25 to $9.50 an hour — would restore it to the level of the prosperous 1960s and ‘70s. If the minimum wage, at the same time, was indexed to the cost of living, then it would automatically keep pace with inflation.

The federal minimum wage serves as a floor for wages nationwide. Beyond that, states and even cities can lift their own minimum wages higher. Seattle recently passed an ordinance that gradually lifts that city’s minimum wage to $15 an hour in 2021.

In New York, Gov. Andrew Cuomo has orchestrated an increase in the minimum wage for fast-food workers, which will go up gradually until it hits $15 an hour in 2021.

He has also pushed the state’s overall minimum wage higher — it is now at $9 an hour for most workers, $7.50 an hour for food service workers who get tips. He has said he wants eventually to bring the state’s minimum for all workers up to $15 an hour.

Since we believe the historical federal minimum of between $9 and $10 an hour is about right, we have no problem with the governor pushing New York’s minimum to that level.

We also support the raise in the minimum for tipped workers. We have never understood how certain businesses — restaurants, mostly — could justify asking their customers to help pay their employees. Tips are fine, but they are voluntary. They should not replace a business’ responsibility to pay a living wage.

But we do not support the governor’s large, arbitrary increase of wages for fast-food workers. This will have a damaging effect on the very people it’s meant to help — the teenagers and part-timers who make up much of the fast-food workforce.

This huge, mandatory boost in the wages of their workers will push fast-food corporations toward greater automation of their service. Technology that allows digital display of menus and touch-pad ordering is already available. We’re also seeing automation of cashier duties at supermarkets, with self-checkout stations.

Customers might prefer to interact with fresh-faced teenagers, but that won’t matter to corporations confronting a 50 percent jump in their payroll costs.

We also do not support a statewide increase to $15 an hour for all workers. Even $15 an hour doesn’t equal a weekly salary sufficient to support yourself in New York City. In much of upstate New York, meanwhile, the primary effect of such a large increase would be to depress employment and make it even more difficult for small businesses to survive.

Nearly a quarter of the workers earning minimum wage in 2011 were teenagers, according to the U.S. Bureau of Labor Statistics. Teens working in the summer and part-time during the school year earn spending money and can even put some cash aside for college.

But the number of jobs available to teens will decline if employers are forced to pay them the equivalent of a $30,000 annual salary. Some jobs will be eliminated, and competition will be fierce for those that aren’t. Since employers will be paying so much, they won’t look for teens trying to get their first job but for experienced workers, and they might get them.

A large, sudden boost in the minimum wage will have widespread consequences, forcing employers to boost salaries generally and creating an enormous extra business expense. That expense will have to be balanced by cost-cutting, which in many instances will mean layoffs.

Moderation should be the mantra of anyone fiddling with the minimum wage. We endorse a federal minimum of $9 to $10 an hour, because that level worked well for decades. We do not endorse arbitrary increases for certain occupations or large jumps of the sort pushed by Gov. Cuomo.

The minimum wage is meant to provide a floor for wages, nothing more. Gov. Cuomo seems to want to use the minimum wage to pry the state economy toward prosperity, but that won’t work, because pushing it too high will have too many damaging consequences.

Local editorials represent the opinion of The Post-Star’s editorial board, which consists of Publisher Terry Coomes, Editor Ken Tingley, Projects Editor Will Doolittle, Controller/Operations Director Brian Corcoran and citizen representative George Nelson.

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