ALBANY – A new report by economists at the University of California-Berkeley predicts that raising New York state’s minimum wage to $15 would improve the living standards of more than 3 million people, far outweighing what the report calls a “small” drag on employment.
This report assesses the broad impact on businesses and the overall economy and employment levels from the proposed phased-in $15 minimum wage. Net employment effects will be minimal and yet over one-third of the state’s workforce will benefit from an average 23 percent increase in their wages. It estimates that raising the now $9-per-hour wage to $15 would give the average effected worker $4,900 more annually.
The authors do concede that higher labor costs could slow job growth and that prices will go up somewhat. But they also expect those adverse effects to be tempered by benefits including increased spending in local economies, higher productivity and less reliance on government assistance.
The report makes a significant contribution to the minimum wage literature since it looks broadly across the economy and factors in both the impacts on workers and business operating costs, and considers the interaction between these forces.
Governor Andrew Cuomo has proposed gradually raising the minimum wage to $15 by the end of 2018 in New York City and by July 2021 elsewhere in the state. The state legislature is expected to vote on the proposal in the coming weeks.
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