As state Assembly Democrats rolled out a bill to boost the state’s minimum wage yesterday, a new study revealed that such a hike could lead to double-digit job losses among the hardest-to-employ New Yorkers.
The proposal to boost the minimum wage by $1.25, to $8.50 an hour, would be the first increase since 2009, when it was raised to meet the federal minimum.
But a study by the Washington-based Employment Policies Institute found that a previous hike by the state sparked a 21 percent drop in jobs among 16- to 29-year-olds who did not have a high- school diploma.
The bill, announced by Assembly Speaker Sheldon Silver (D-Manhattan), would boost the rate from the current, federally set $7.25 and automatically increase it annually by the rate of inflation.
New York’s minimum wage would jump above all its neighboring states under the Silver plan, although New Jersey may consider similar legislation.
The study compared employment trends in New York between 2004 and 2006 — when the Empire State raised its minimum wage twice — with those in Pennsylvania, Ohio and New Hampshire, where there was no increase.
While prior studies suggested every 10 percent increase in the minimum wage led to a 1 to 3 percent drop in employment for less-skilled employees, the authors said the new study found a 7 percent dip for young high-school dropouts.
“Our results suggest that future increases in New York’s minimum wage would likely reduce opportunities for the least-skilled and least-experienced members of the state’s workforce — the same people that advocates purport to help,” said co-author economist Joseph Sabia, of San Diego State University.
Advocates for a higher minimum wage downplayed the report’s findings, claiming the institute is a front group for the restaurant and hospitality industry.
Both Gov. Cuomo and Senate Majority Leader Dean Skelos (R-LI) were noncommittal yesterday, although Cuomo said he wants to hear from business groups and others “to understand the impact of a minimum-wage increase on the economy.”
“We wanted to do something that’s both significant yet reasonable in terms of not shocking to the business community,” said Silver, who pointed to studies — some union-backed — that claim raising the minimum wage does not lead to job cuts.