The renewed commitment by lawmakers in 2011 to finally change the state’s economic trajectory is being threatened! While Governor Cuomo started 2012 off still highlighting the need to create jobs and help businesses, Speaker Silver is not.
Raising the minimum wage in New York is well intended, but has enormous adverse consequences for businesses and consumers.
Consider that for all the positives in 2011, the needle was only moved slightly and clearly there is more substantial work to be done. Taking thirty seconds to look at New York’s tax climate and cost of doing business rankings prove this point.
So with the economy languishing and costs rising, why would Speaker Silver want to mandate an increase in wages? He says to help those families struggling to make ends meet and to create jobs. No one would oppose that, but the facts show that the Speaker is wrong.
A recent study by Cornell and American universities estimates that a minimum-wage increase from $7.15 to $8.25 an hour, less than the proposed 17 percent hike in New York, would cost almost 29,000 jobs! It will also increase the price of goods and services that small businesses provide, and with consumers having less money in their pocket and sales already treading water, this has the potential to have disastrous results.
For those struggling families, consider the Earned Income Tax Credit. Currently, EITC is providing more than $4.5 billion in benefits to help ensure no one is supporting a family at or below poverty levels – without decreasing employment opportunities or diminishing purchasing power.
There are better alternatives to create both opportunities for unemployed New Yorkers and a more viable and vibrant economic climate in New York. Speaker Silver and the rest of his colleagues in the legislature need to stay the course. Cutting taxes, reducing red-tape and creating more job opportunities will do far more to help New York’s small businesses and working poor.