Following through on Speaker Silver’s promise earlier this month, the Assembly is reportedly about to introduce a bill raising the minimum wage from $7.25 to $8.50 an hour, with automatic increases thereafter in line with the cost of living. As we’ve noted here before, this is a swell way to reduce job opportunities for low-skilled, entry-level workers — and it’s not a very effective way of helping the working poor, either.
As Rus Sykes pointed out here recently, New York’s exceptionally (and appropriately) generous Earned Income Tax Credit (EITC) already delivers over $1 billion in wage subsidies to ensure that no one really has to support a family on $15,000 a year. Unfortunately, the EITC and other social program supports for the working poor went unmentioned in today’s New York Times story on the Assembly bill.
Together these refundable credits provide $4.5 billion annually ($3.5 billion federal and $966 million state) in wage supplements to low and modest working families — money that is re-spent in the NYS economy, Rus points out. As the chart below demonstrates, the EITC already effectively raises the minimum wage from $7.25 hour to $10.44 hour without driving up the cost of labor, and killing jobs. Unlike a minimum wage increase which increases wages and the cost of labor across the board, the EITC targets maximum benefits to families earning approximately between $10,000 and $20,000 annually.
About the Author
You may also like
At mid-year, NY still far below most states in pandemic jobs recovery
New York has added private-sector jobs in all but three of the 38 months since the COVID-19 outbreak of March 2020—but the Empire State remains below its pre-pandemic employment level and continues to trail the national recovery.
On a seasonally adju Read More
At end of ’22, NY still near bottom in pandemic recovery
The more time passes since the spring 2020 Covid-19 outbreak, the more New York stands out among all states for the weakness of its post-pandemic employment recovery.
As of December, seasonally adjusted private employment in New York was still nearly 2 Read More
What’s behind NY’s union membership slide?
The frequency with which New York workers are choosing to belong to a union last year continued its multi-year decline. Read More
NY pandemic recovery update: climbing, but still far behind
Private employment in New York State remained more than 300,000 jobs short of the pre-pandemic level Read More
NY’s jobs recovery now strongest downstate
The Empire State's private-sector employment gains over the past year have been increasingly concentrated in New York City. Read More
The New Greenwashing – False Advertising about Green Energy Jobs
In the private sector, false advertising can get you into legal trouble. In the public sector, it’s often good politics. Read More
The debate over Medicaid home-care funding needs a reality check
The push in Albany to boost wages for home health aides is seemingly disconnected from the larger realities of the state’s long-term care system.
As they , officials in the home care industry are warning that the state faces an of in-home caregivers Read More
As leaves turn, NY’s post-pandemic recovery still has very far to go
New York was the national epicenter of the pandemic, and Governor Cuomo's "New York State on PAUSE" business shutdowns and other restrictions led, in short order, to the loss of nearly 2 million jobs in the first full month after the infection began spreading in the New York City area. Read More
Enjoying our work? Sign up for email alerts on our latest news and research.