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Business Group Warns Wage Hike Will Kill Jobs

5:23 PM, Dec 4, 2012   |    comments
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By Jon Campbell, Albany Bureau

ALBANY -- A new report from a business-backed group claims an increase in New York's minimum wage would cause significant harm to the state's small businesses, causing significant job loss over the next decade.

The National Federation of Independent Business -- one of the most ardent opponents of a wage hike -- released the report Tuesday morning.

The study found Assembly Speaker Sheldon Silver's proposal to increase the hourly rate from $7.25 to $8.50 and tie it to the rate of inflation would result in 22,000 less jobs over 10 years, resulting in a $2.5 billion hit to the economy.

In addition, the group's study claims the cost of hiring entry-level labor would jump between 17 and 66 percent, depending on future inflation.

"Simply, raising the minimum wage will not create jobs," said Mike Durant, the group's state director. "It will affect the smallest businesses that can least afford higher labor costs and they'll respond by finding ways to reduce or limit the number of jobs they create."

Studies touted by supporters of the proposal have come to opposite conclusions.

A March report by the Senate's Independent Democratic Conference found increasing the hourly wage would be positive for the state's economy, to the tune of $600 million and 4,800 new jobs. The conference's leader, Sen. Jeff Klein of the Bronx, is the Senate sponsor of the bill.

Democrats in the state Legislature have been pushing a minimum-wage increase, saying it is long overdue and would help the economy because the low-wage earners would spend more money.

The Independent Democratic Conference entered into a power-sharing agreement with Senate Republicans on Tuesday, ensuring the breakaway conference equal authority over which bills are put to a vote. Klein signaled that a bill to increase the minimum wage will be put to a vote in 2013.

"When wages go up, people are able to spend," said Karen Scharff, executive director of Citizen Action of New York. "It strengthens our economy overall as well as improves the lives of those workers whose wages go up."

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