Expert Roundtable: Wages

New York lawmakers weigh in on city and state wage issues

SHELDON SILVER
Assembly Speaker

Q: What will passing the minimum-wage bill do to the state’s economy? Can we expect job growth out of it, or is it more of a quality-of-life issue?

SS: Increasing the minimum wage is vital to stimulating our local economies. By increasing the minimum wage by $1.25 to $8.50 an hour, minimum-wage workers will earn an extra $2,275 a year. Studies show this extra income will be spent at local businesses. Higher wages mean higher incomes. Higher incomes mean greater spending, which provides a boost to local economies and encourages more hiring. Even more important, raising the minimum wage in New York is a matter of dignity. No one who works full-time should be forced to live in poverty. Full-time employees should not have to choose between paying for housing, putting food on the table and providing clothes for their children. This is a matter of basic human dignity. Someone who works full-time should not be poor.

Q: Whether or not the minimum wage is raised $1.25, should it at least rise automatically with inflation? Why or why not?

SS: The legislation passed by the Assem-bly last week has two critical components. First, the minimum wage must be increased. Frankly, it is absurd to expect anyone, particularly a working family, to afford the cost of living today and be able to invest in their future on a salary of $7.25 an hour. People earning minimum wage are trapped in a hopeless cycle of poverty. This legislation would also index it to the rate of inflation in order to prevent further erosion as the cost of living rises in the future. It is essential that the legislation includes each of these components.

Q: Should a minimum wage vary across the state? Should it be higher in New York City?

SS: Working families continue to struggle every day. Wages remain constant as the costs of essentials continue to rise. They need immediate relief. Cities in New York do not currently have the authority to increase the minimum wage. However, the State Senate has the power to quickly change the lives of New York’s working poor by the simple action of approving this legislation before the end of session in June.

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HOWARD WOLFSON
Deputy Mayor of New York City for Governmental Affairs

Q: What impact will the living-wage bill have? Who will it help and hurt?

HW: Under Mayor Bloomberg’s leadership we have created an environment that encourages people and businesses to come to New York City and stay here. The businesses that have invested in New York City have created a record number of jobs in the city and helped us bounce back from the recession faster than the rest of the country. But unemployment is still far too high, and we need to do everything we can to allow business to create jobs. The living-wage bill does exactly the opposite of that. It will impose costly conditions on busi-
nesses and make it harder for them to grow. The way to raise salaries and create opportunities is not for government to impose legislative mandates. It is for government to foster broad-based economic growth that gives people opportunities to climb up the economic ladder.

Q: What impact will the prevailing-wage bill have? Who will it help? Who  will it hurt?

HW: The prevailing-wage bill says that if the city leases space in a private building, the building’s owners cannot pay its service workers what they wish—as any other building would, including the one across the street. Instead they must pay their workers a rate set by the city comptroller. Having government tell the private sector what to pay will lead to market distortions that cost taxpayers money. Building owners won’t sign leases with the city unless the city pays the additional costs the owner would incur as a result of having to pay the higher, government-mandated wages. The end result of this bill is that taxpayers will be forced to pay part of the wages of private-sector employees.

Q: Should the state pass a higher minimum wage? Why or why not?

HW: Yes, minimum wage should keep up with inflation, and it has been too long since the state increased the minimum wage. Raising the minimum wage will not cause a competition problem for New York, since our neighboring states have recently passed increases. Unlike the prevailing- and living-wage bills, raising the minimum wage does not favor some businesses over others, or some industries over others.

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MELISSA MARK-VIVERITO
New York City Councilwoman, Civil Service & Labor Committee Member

Q: Was the living-wage bill a reasonable compromise?

MM: The living-wage bill adopted by the Council provides a critical step forward in our efforts to raise wage standards for all New Yorkers, and sends a strong message that we cannot continue to distribute millions of taxpayer dollars each year in exchange for poverty-wage jobs. I believe that we struck the right balance given the current political and economic climate. The exemptions we made for small businesses, affordable housing and nonprofits demonstrate our commitment to targeting the legislation to the largest corporate entities receiving the largest taxpayer subsidies.

Q: What impact will the legislation have?

MM: The modest increases to employees’ wages represent a drop in the bucket for most of the large entities applying for huge taxpayer subsidies but can make a real difference for the average working family in New York City. Beyond the hundreds of jobs each year that will immediately be impacted when the legislation goes into effect, the bill sets up a policy framework to raise wage standards on the city’s economic-development portfolio going forward.

Q: Should the city pass a stronger or broader bill?

MM: This legislation has opened the door to expanding and strengthening even further what is already the strongest living-wage law in the nation. These conversations will undoubtedly continue in the next mayoral administration, especially as the cost of living continues to rise in our city and the income gap continues to grow. There is no question that we need to continue our work to create quality, middle-class jobs, especially in economic-development projects where the city is investing precious taxpayer dollars.

Q: How much of an issue do you think living wage will be in the 2013 mayoral race?

MM: The extensive organizing efforts around this legislation have made clear that New Yorkers want to see an even broader living-wage policy in the future, and I believe our next mayor will have to make real concerted efforts to raise wage standards in this city.

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ALPHONSO DAVID
Cuomo Administration Deputy Secretary for Civil Rights

Q: One problem facing state workers is the growth of improper worker classification. What is the nature of that problem?

AD: Employee misclassification occurs when an employer incorrectly labels an employee as an independent contractor or fails to report their employment (i.e., “off the books”). This illegal cost-cutting practice not only negatively impacts law-abiding employers who have to compete in the marketplace but it deprives the state of revenue due to nonpayment of taxes. Further, misclassified employees are denied the protection of various employment and labor laws, including but not limited to eligibility for unemployment insurance, workers compensation and overtime pay.

Q: What is the state doing to solve it?

AD: New York State has and continues to address employee misclassification in a variety of ways. Principally the state established the Joint Enforcement Task Force to address employee misclassification in 2007, which Gov. Andrew Cuomo continued with an executive order in January 2011. The task force carries out its mission by engaging in joint enforcement sweeps, coordinating assignments among agency partners, making systematic referrals to appropriate law enforcement agencies, and implementing the sharing of data between agencies.

Q: How widespread is the problem?

AD: In February 2007 the Cornell University School of Industrial and Labor Relations issued a report estimating that approximately 10 percent of New York’s private sector workforce is misclassified each year, and that close to 15 percent of the construction industry workforce is misclassified in a given year.

Q: Are there more laws that should be passed to help prevent this problem?

AD: The state is focused on utilizing existing laws and policies to address this issue. However, employers, particularly small businesses, need to be educated on the issues. Accordingly, the state is engaged in a series of initiatives to educate employers about worker misclassification and other relevant issues.