April 23, 2016

It is important to understand what the minimum wage is and what it is not. A minimum wage was mandated in an effort to prevent employers from underpaying their workers for minimal jobs which require minimal education and skills. These are jobs in the fast food industry, retail, manufacturing and farming. Even though there is a minimum wage, the market for labor dictates wages above the minimum often found in those same industries due to a shortage of workers or due to better educated workers. These type of jobs are often held by young people, students, seniors and those without a college education. These jobs are often a stepping stone to jobs with higher pay and were not meant to be a career. Yes, while some may want to have a career in retail, they would often start out as a sales associate and work their way up into management. A minimum wage is a starting point.  

Is it shocking to predict that the cost of living will again rise in New York? Of course it will. The purpose of a business is to make money and to increase shareholder wealth not to bear the burden of a misguided social program. Business will simply pass on the cost to each and every New Yorker. When families go out on the weekend to eat dinner, prices will be will be higher. The cost of food and clothing, will go up. Entry level jobs will be cut as businesses will need to cut costs. Some will become more innovative such as utilizing kiosks to order and pay for food. Manufacturers and farmers will move to automation eliminating jobs. Those who cannot change or change fast enough will go out of business. Some may move to other states with a better business climate. It will also increase the cost of government by way of higher wages. There will be consequences. 

Not to be outdone with a higher minimum wage, Governor Cuomo pushed for twelve weeks of paid time off. While that may sound really good and undoubtedly will help some people, its just another cost to the middle class. The program will be funded by higher taxes borne by the middle class. Yes it starts out very small at a projected dollar or two per worker per paycheck, however there is no prior baseline to establish the actual cost of the law and as always with government run programs, the cost always goes up. It’s also important to note that the law requires higher deductions on those making more then $67,000 per year. Considering the high cost of living in New York, making $67,000 is not a lot in the vampire state.  

Considering that New Yorkers pay some of the highest taxes in the nation, what has Albany done to lower taxes? This year they passed a small income tax cut and gave out property tax rebate checks. It is like a person drowning; the water is right below your mouth and their solution is to keep the water level right below your neck rather then throw a lifeline and save you. Why not cut property taxes? Why not cut the income tax? The answer is control. The politicians want to keep control over voters and be able to dole out your money then brag about what they did for you. Giving rebates and more money to local school districts does nothing to solve the structural problem. It is spending, spending, spending. What happens when the money for rebates run out? How much higher can school spending rise? We currently spend $22,500 per pupil. How much more can New York State government borrow? We currently owe $250 billion in public authority debt and around $70 billion in state debt.  

The promise of a $15.00 wage and twelve weeks of paid time off can be alluring. This is no different then the promise of free college education, free cell phones and a right to healthcare and home ownership. In the end, someone has to pay for it. Once again, it will be you, the middle class.