Higher wages and fewer jobs- that’s the undeniable takeaway from a recent study looking at the economic impact of a $15 an hour minimum wage in New York State. The study was commission by the Empire Center and conducted by two nationally recognized economists who concluded that at least 200,000 jobs would be lost throughout New York State if the minimum wage was raised to $15 an hour. More than 15,000 of those jobs would come from the Buffalo Niagara job market.
The Empire Center’s EJ McMahon traveled to Buffalo recently to provide Partnership members with a detailed analysis of the study and context around Governor Cuomo’s proposal. What is clear is that a 67% wage increase will not only negatively impact employers, but taxpayers, consumers and those currently struggling financially.
“Fifteen is unprecedented”, said McMahon. “It’s really, really high in historical terms, it’s really, really high even in global terms.”
Not only is a $15 minimum wage sharply above New York State’s historic all-time high minimum wage adjusted for inflation, it would be the highest state-wide minimum wage in the country. But it doesn’t stop here. No developed country around the world has a higher minimum wage than $12 an hour when adjusted from purchasing power parity.
While most of the talk around raising in the minimum wage in New York State has centered on fastfood workers, the Governor’s proposal would impact a huge segment of our local economy. According to the US Bureau of Labor Statistics, approximately 25% of people working in the Buffalo Niagara metro area in 2014 made less than $15 an hour. That figure does not include food service jobs which tend to be among the lowest-wage occupations. Forcing higher wages across all of these occupations will drive up the costs of goods and services across the board.
A $15 minimum wage seems all the more outrageous considering the median wage for all occupations in the Buffalo Niagara area is $16.71 an hour. As we know, increasing the minimum wage 67% will not just impact the wages of people currently earning minimum wage, but force employers to raise wages for people currently earning $15 or more an hour.
Beyond devastating impacts to employers, McMahon says the ones most hurt by this proposal will be the people the Governor is attempting to help as employers will be forced to make tough decisions about how many employees they can afford.
“The minimum you can make is nothing,” said McMahon. “The real risk here is that hundred of thousands people, virtually all of them poor people, and many of them younger poor people of color living in places like Buffalo, will be making nothing because they will find it hard to find work.”