How Much Can $1.25 Change Someone’s Life?

Albany debates minimum-wage increase, with politics playing a starring role

Five days a week Michelle Dawkins wakes up at 2:30 a.m. and drives from her Bronx apartment to begin her shift at JFK Airport, ferrying wheelchair-bound passengers among the airport’s eight terminals. From 4:30 a.m. to 12:30 p.m., Dawkins—whom her co-workers affectionately call “Mother Love”—will make $7.25 an hour, or $58 for the day. If Dawkins, 42, doesn’t require an unpaid sick day, and if the airport needs her for 40 hours each week—which is not always a certainty during the lean fall and winter travel season—she will make $15,080 over the course of a year.

Under a new proposal currently being debated in Albany, Dawkins and the 91,000 other New Yorkers who make the federal minimum wage will see that hourly wage increase by $1.25.

Five more quarters an hour will not be enough to lift Michelle Dawkins out of poverty, take her off food stamps or get her away from Medicaid, but she said it would make a difference. In 2002 she made $13 an hour as a security screener, but she left the job to take care of her mother, who died of breast cancer two years later. In 2005 she made $11 an hour doing the same job she has now, but for a different company.

“I say any bit, even if it’s a quarter more, you’re gonna turn around and see a difference,” she said. “If it went to 10, it would make a world of difference.”

“We could go to restaurants, we could go to movies, we could get an accountant,” she joked.

Minimum-wage jobs are the fastest-growing sector of the state’s economy, and the number of workers making $7.25 an hour jumped dramatically from 6,000 in 2008 to 91,000 by 2011.

But whether Dawkins receives the extra $1.25 per hour, which will cost her employer an additional $2,900 a year, will have very little to do with how badly she wants or needs it—or even with what economists, business owners and voters say they want—and everything to do with politics in Albany.

Assembly Speaker Sheldon Silver has staked his legislative session on a policy move with a long history of winning seats for Democrats in tight elections. Senate Republicans won’t touch anything branded job-killing with a ten-foot pole unless they get something in return. And Gov. Andrew Cuomo is not actively championing the bill, a move seemingly designed to keep all the sides playing against one another while he maintains his position as the ultimate referee.

When Speaker Silver introduced Gov. Cuomo before his State of the State Address in January, he used the occasion to announce he would seek an increase in the minimum wage as his major legislative priority for the year. Cuomo later said he was in favor of the increase.

The timing of Silver’s proposal was auspicious—minimum wage is an issue that Democrats use to win campaigns. The proposed minimum-wage hike has the broadest approval of any legislative measure in recent history, with 79 percent of statewide voters and 61 percent of Republicans in favor of an increase.

In an election year in which Republicans in the Senate must hold onto their tenuous majority, Democrats have effectively dared Republicans to let November roll around without voting “Yes” on an issue that has overwhelming popular support.

“Given the state of the economy and the broad-based popularity of the issue, the increase in the minimum wage is something that could affect any race in the state,” said Sen. Mike Gianaris, chairman of the Senate Democratic Campaign Committee.

“My preference is to have Senate Republicans follow their typical pattern and buckle to our agenda to avoid a political problem,” he joked darkly. If Republicans didn’t pass it, then Democrats will make the November elections into a referendum on minimum wage, he said.

Dan Cantor, the executive director of the Working Families Party, said advocates are trying to urge individual Republican senators to convince Sen. Majority Leader Dean Skelos to bring the bill to the floor for a vote.

“We have to convince Republican senators that this is economically, politically and morally smart,” he said, adding, “If they don’t pass it, then that’s why we
have elections.”

So far, Senate Republicans seem content to take their chances. Skelos has routinely referred to any increase as a “job killer,” and last week the Republicans defeated Democrats’ efforts to attach a minimum-wage amendment to a tax-cut bill.

In the months after Silver announced the proposed wage hike, lobbyists and economists opposed to the bill mobilized to amplify Skelos’ argument. The Business Council of New York State, which shares members with the Committee to Save New York, the group that spent $22 million lobbying on behalf of Cuomo’s budget this year and last year, released a statement calling the proposed wage hike “unconscionable,” arguing it would result in “lost jobs and a reduction in training opportunities for low-income employees.”

Opponents like Nicole Gelinas, a policy analyst for the conservative Manhattan Institute and the Business Council, cite a 2008 economics paper coauthored by economists from Cornell and American University that tied increases in the state’s minimum wage to lost jobs for poor and lower-skilled workers.

“It could cost 29,000 jobs, and only 20 percent of the benefits would go to workers working in poor households,” Gelinas said.

According to Gelinas, a follow-up study by the same economists issued in January demonstrates that “the biggest effect is on lower-skilled workers and younger workers. If you raise the minimum wage, it does hit a lot of the smaller businesses. They decide ‘We’ll do more of this work ourselves.’ ”

But James Parrott, an economist at the liberal-leaning Fiscal Policy Institute who supports an increase in the minimum wage, said the widely touted study had two flaws: Its findings of an overall decrease in employment for teens in New York over the past decade had more to do with rising levels of college attendance than it did with minimum-wage increases, and the study itself was partially funded by the Employment Policies Institute, a nonprofit group funded in part by the National Restaurant Association, a trade association opposed to raising the minimum wage.

Where economists on both sides of the debate agree is that the earned-income tax credit (EITC), a 15 percent refund given to aid the working poor, is as much if not more help to poor New Yorkers than the minimum wage. Gelinas argues the EITC should be increased instead of the minimum wage. Parrott argues both are necessary, and that the EITC is intended as a complement to a wage floor.

“The wage floor protects workers against unscrupulous businesses who have no compunction about paying workers peanuts,” Parrott said.

The present Republican opposition is a striking contrast to 2004, when the Senate voted 50–8 to raise the minimum wage by 39 percent, from $5.15 an hour to $6.00 an hour, and overrode Gov. George Pataki’s veto. Nearly every one of the current Republican senators in office in 2004 voted “Yes” on the increase, including Skelos. The only exceptions were Sens. Steve Saland, Mike Nozzolio and Jim Seward. In the current debate two senators, Joe Robach and Mark Grisanti, who have high numbers of impoverished constituents, have said they are open to supporting the increase.

Though Cuomo has expressed his support for the wage hike, he said in recent weeks that passing it would be more difficult than last year’s mammoth effort to legalize same-sex marriage.

“I believe it’s a political, philosophical divide,” he told reporters in the Capitol last month. “I don’t believe we’re going to be able to bridge that gap in this remaining period of time.”

But Cuomo also has an interest in maintaining the balance of power in the Legislature, with a Republican majority and a Democratic Assembly.

Back in 2004 Cuomo supporter and CSNY board member Kathy Wylde, the president of the Partnership for New York City, supported a minimum-wage increase. Now she, like Cuomo, seems to be taking a wait-and-see position.

“We supported a minimum-wage increase in the past, but we have not taken a position on the current bill,” said Michael Levoff, Wylde’s spokesman. “We are waiting to see the final product of ongoing negotiations on various items that will be linked in the end-of-session legislative package.”

Mark Dunlea, the executive director of Hunger Action Network and a welfare-rights advocate, said that his hopes sank for the bill when it was dropped from budget negotiations in March.

“I think there’s a lot of Machiavellian political games being played here,” he said.

The prevailing wisdom in the Capitol is that if the minimum-wage hike passes before the end of the session, it will be at the last minute, joined to other legislation. In Albany rumors were flying last week that the wage hike will be linked to a $136 million tax-cut package Skelos is proposing. He connected the two issues in an interview with the Albany Times Union last week.

“If the Speaker is serious about creating jobs and wanting to help, especially small businesses creating jobs, he’ll support us,” Skelos told the Times Union. “The minimum wage, as I’ve said all along, is a job killer right now. When the economy is good and the private sector is booming, we can consider an increase in the minimum wage…. It’s the wrong time now. Our [legislation] is about creating jobs.”

Skelos’ position belies the fact that many small retail businesses throughout the state, ones with 500 workers or less, actually already pay their workers more than the minimum wage, roughly $9 an hour
on average.

On a recent conference call with reporters organized in support of the wage hike, the heads of businesses like Costco, Brooklyn’s Uncommon Goods and the Greater New York Chamber of Commerce said that slightly higher wages would lead to lower employee-turnover rates and increased productivity. Higher wages for low-income workers also translated to more spending in the areas immediately surrounding
workers’ homes.

Costco senior vice president Jeff Long said the company’s wages, which are higher than those of companies like Walmart, had no impact on their ability to price goods competitively.

“We have, demonstrably, the lowest prices of any retailer that we compete with, and we pay the highest wages,” Long said. “I think it’s a matter of more productive employees being better for the business in the long-term.”

Most of the state’s low-wage employees work for one of the following companies, according to an analysis by the National Employment Law Project, which supports increasing the minimum wage: Walmart, Yum! Brands, McDonald’s and Target. Both McDonald’s and Walmart directly lobbied state lawmakers against increasing the minimum wage.

Another of the groups lobbying at the state level is Airlines for America, the trade association that represents airlines responsible for Michelle Dawkins’ wages. Dawkins works for a company called Air Serv, which has a contract through Delta Airlines to provide services like cleaning, security, baggage handling and wheelchair attendants.

The company’s leadership has also drawn sharp criticism in the past for its low wages.

An Atlanta-based company with $15–20 million in annual revenue, Air Serv is headed by CEO Frank Argenbright, who formerly headed a national security company called Argenbright Security. He was ousted from his previous post after September 11, when a federal investigation found his low-paid screeners allowed hijackers at Dulles and Newark airports through the security system.

With the end of the session drawing close, Assembly Democrats are trying to press the point.

When Democrats convened at the Hotel Albany in mid-May for their annual convention, Speaker Silver first praised Cuomo for “his willingness to listen,” and then introduced the state’s new Democratic co-chair, Assemblyman Keith Wright, as one of the cosponsors of the minimum-wage bill.

“I look forward to what we can accomplish together in the years to come. Together we are cosponsors of highly popular legislation that will increase the state’s minimum wage from $7.25 cents and hour to $8.50 cents an hour. We know we’re committed to doing it because it’s a matter of human decency,” said Silver, to applause.

Wright then spoke for a quarter of an hour, applauding Cuomo’s work to employ minority youth and his strengthening of rent regulations. “I could go on and on and on,” he said.

However, he did not mention the minimum-wage increase, a bill with his name on it.

When asked last week about the likelihood of the bill’s passage this year, Wright said that he has never spoken to Cuomo about it. “He and I have not talked about this,” he replied.

Wright said he couldn’t explain why the Senate Republicans were putting up such a fight on the minimum-wage bill.

“I don’t know,” he said. “They seem to pledge an oath of fealty to business and business interests. There’s nothing wrong with promoting businesses and such. I just don’t think they’re really looking at the facts of what a minimum wage would do.”

Wright conceded the bill might not pass by session’s end, but it wasn’t gone.

“It still has a life,” he said.

By the time November’s elections roll around, Michelle Dawkins will be preparing for the slow months of a downturn in regular air travel. In the meantime, she works double shifts when she can get them.

“I can make anywhere from 90 to 100 hours,” she said, sitting in the living room of her mother’s old house as her 9-year-old son, Josiah, darted past a shelf cluttered with family photos, small plants and knickknacks.

Dawkins is not going hungry, and neither are her kids. But she has no disposable income. Her kids take it well, she said.

“I’m really proud of the kids that I had, because if you have to say no to them, it’s not like they don’t understand,” she explained. “I say I’m not making as much as I used to make.”

She refused to get Josiah a game last week.

“The minute I have a good day… If I come home with a good day of tips, I’d turn around and get him a game in a heartbeat.”

If Dawkins got five quarters more an hour, she “wouldn’t get to keep all of it,” points out economist James Parrott.

“It might be she’ll have to pay a little more in state, federal income taxes,” he said. “For some workers, workers who have fewer children and families where there are two earners, their EITC might actually go down, but there’s no way, after accounting for all that, her take- home pay wouldn’t be better off.”

“And isn’t that what we want to happen as a society?” he concluded. “Have workers better able to pay their own way?”

lnahmias@cityandstateny.com