ALBANY A proposed $15 minimum wage could cost the state nearly 200,000 jobs, two fiscally conservative groups contended in a report Thursday.
The Empire Center, a think-tank based in Albany, and American Action Forum, a group in Washington, said they would expect jobs to plummet if Gov. Andrew Cuomo and Democrats get their way next year and raise the minimum wage to $15 an hour in New York City by 2018 and statewide by 2021.
The report is the latest fuel to what will be a pitched battle at the Capitol over increasing the current $8.75 minimum wage, which is set to go to $9 at year's end.
Business groups on Wednesday formed a "Minimum Wage Reality Check" campaign to try to beat back the higher wage. The legislative session resumes in January.
"We like to focus on what we think is the core issue here, which is how a $15 minimum wage will actually affect people," said E.J. McMahon, president of the Empire Center.
Cuomo's office quickly debunked the report and the groups' motivation.
"It's no surprise this report mirrors the world view of an organization backed by the very forces that fight against every minimum wage increase and runs counter to the findings of the U.S. Labor Department, noted economists and past experience in New York," Cuomo spokesman Rich Azzopardi said. "The governor and a majority of New Yorkers believe that if you work full time you shouldn't be condemned to a life of poverty."
Recent polls have shown a majority of New Yorkers support a $15 an hour minimum wage, and the governor's office cited state and federal reports that shows in six of out seven times New York has increased the minimum wage since 1991, employment increased afterward.
The office also pointed to an analysis by economists at Goldman Sachs and the The Center for Economic and Policy Research in Washington that showed that in 13 states, including New York, that increased the minimum wage last year, they all had higher rates of employment growth than the national average.
The business-backed groups' argued that while a minimum-wage increase would benefit some workers by increasing their earnings, it would also hurt hundreds of thousands of others whose earnings would sink because they could no longer find or keep a job. The reason: Companies would employ less people.
Advocates for a $15 minimum wage has dismissed the criticism from business groups, saying that a higher wage would improve the economy by giving people more money to spend — which in turn would help companies.
Democrats and unions said they will push to limit the income inequality in New York — which is home to some of the wealthy people in the country, but also has some of the worst poverty rates, particularly in some upstate cities like Buffalo and Rochester.
"It's time to raise up our communities, our state, and our nation with higher wages; it's time to build a better economy that strengthens all working people and all families, not just the wealthy elite," Stuart Appelbaum, president of the Retail, Wholesale, and Department Store Union, said in a statement Sept. 10.
Cuomo has already enacted a $15 minimum wage for fast-food workers. They will get $15 a hour statewide by 2021.
"Raising the minimum wage to $15 an hour will bring fairness to 2.2 million working New Yorkers," Cuomo said Sept. 10. "$15 an hour will be the highest statewide rate in the nation and will herald a new economic contract with America, and it's about time."
Using federal studies and guidelines provided by the Congressional Budget Office, the groups estimated that the job losses could be as large as 588,000.
The biggest impact would be in upstate New York, where the cost of living is lower and more workers make at or around the minimum wage, the group siad.
A $12 an hour minimum wage would impact about 2.3 million workers statewide, about 24.4 percent of the employed population, the report said. Raising it to $15 per hour would impact about 3.1 million workers, or 33.2 percent of the workforce.
Douglas Holtz-Eakin, president of American Action Forum and lead author of the report, said the minimum wage increase would not necessarily help people out of poverty but would more likely have an adverse affect on the job market by creating "slower growth, the inability to expand businesses, the inability to start new businesses."
This slower growth would take a toll on workers, he said, by preventing them to get entry-level jobs.
"Only about 6 percent of that [wage]increase goes to people actually living in poverty. So as an anti-poverty low-income program, the minimum wage turns out to be very poorly targeted," Holtz-Eakin said.
The raised wage would only increase the costs of goods and services, which would cut into people's higher wages, he said.
McMahon said the wage increase to $15 is a huge jump and doesn't take into consideration the median wage of some parts of the state, which in some regions of upstate is already close to $15.
"Most upstate regions, the median wage is less than $18," he explained. He said in other parts of upstate, the median wage is around $17 and is below $16 in many others.
In the Finger Lakes, the report estimates the amount of jobs lost will be anywhere from 13,600 to 38,400. In the Southern Tier, the report puts the number of potential losses anywhere from 7,000 to 18,800.
Western New York is estimated to lose 15,400 to 44,300 jobs, and the Hudson Valley region is estimated to lose anywhere from 13,600 jobs to 38,400 jobs.
