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Politics and Government

Minimum wage rate likely to dominate 2016 state legislative session

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Workers rallied earlier this year in New York City for a higher minimum wage.

The New York State Senate held a hearing on raising the minimum wage to $15 an hour. While Gov. Andrew Cuomo and Assembly Democrats support the phase in to a higher wage, many senators remain uncommitted.

Senate Labor Committee Chair Jack Martins says he wants to broaden the discussion beyond simply phasing in a minimum wage increase to $15 an hour, saying the real issue in many regions of the state is the lack of opportunity for work that provides a middle class salary, and enables small businesses to thrive.

Martins asked E.J. McMahon, president of the fiscally conservative think tank, the Empire Center, how the transition to a higher wage could adversely affect smaller employers, versus the large chain stores like a Walmart or Home Depot.

“A year or two, three years down the road, my locally owned hardware store is out of business and Home Depot is still here?” Martins asked.

McMahon says he believes the wage increase will lead to more closures of small stores. Currently, the local businesses compete by providing a higher level of personalized service. He says if the price of employment goes up, they lose their edge. McMahon says the chain store conglomerates are much better equipped to pay higher wages.

“They are big, fat capital intensive businesses with huge marketing budgets,” McMahon said.

McMahon says a regional minimum wage would be  better, taking into account the lagging upstate economy. He says the current campaign is based on workers at a “McDonald's in mid town Manhattan.”

Sen. Diane Savino proposed a regional minimum wage bill, but she also supports the phase in to $15 an hour. She told SEIU health care workers union President George Gresham that in order to implement an increase for home care workers who are often paid very low wages, Cuomo will have to re-examine the cap on Medicaid spending. Many health care workers’ pay is based on the Medicaid reimbursement rate.

Gresham, who has a close relationship with Cuomo, agreed.

The union leader talked of the dignity that his father gained, when he stopped being a domestic servant and became a truck driver. Gresham says before that, the household telephone line was frequently turned off for lack of money,  something that humiliated him when a teacher pointed it out once in school.

“She said to the whole class ‘your family doesn’t keep the phone on,’ and I remember how embarrassed I was,” said Gresham, who says until his father became a teamster,  phone service had to be optional if more pressing bills were due.  

Though Gresham concedes that $15 an hour is “not a magic number,” he says it does match the rate of inflation from the original minimum wage created by Franklin Delano Roosevelt in the 1930s.

Cuomo did not send any representatives to the hearing, something Labor Committee Chair Martins said was regrettable.

Cuomo has held numerous rallies, though, making his position clear, and framing the issue in the context of income inequality. He’s already taken executive actions to phase in a $15 an hour minimum wage for fast food workers and state workers. In the lead up to this State of the State message, he held an event with an enthusiastic crowd of union leaders.

“We are done being abused as a work force so we can subsidize the richest corporations in this country!” Cuomo shouted. “That’s not going to happen.”

The harshest criticism of the $15 an hour minimum wage proposal comes from the head of the state’s Republican Party. GOP Chair Ed Cox came to the Capitol to denounce Cuomo’s efforts, calling the plan a “job killer," which is riddled with factual errors. And Cox compared the governor’s rhetorical style to former Cuban dictator Fidel Castro.

“When you stand up in front of audience telling big lies in a loud booming voice as if it was an absolute certainty and you repeat it over and over again,” Cox said. “That is exactly what Fidel Castro did in Cuba.”

The GOP chair accused Cuomo of trying to dictate policies.

Cuomo spokesman Rich Azzopardi brushed off Cox’s critique, and compared Cox to a certain Republican presidential candidate known for his speaking style.

“It wasn’t the best Donald Trump impression I’ve ever heard, but I’ll give it an A for effort,” Azzopardi said.

The governor has not yet introduced a formal bill on raising the minimum wage, that, and negotiations with the Senate, come after the State of the State speech on January 13 .