New York is one of 13 states whose minimum wage will increase in 2014, according to the Employment Policies Institute, a national group that believes the hikes have “devastating” effects that are a barrier to employment for lower-skilled job-seekers. The minimum wage in five western and southwestern cities and counties will also go up next year, the group said.
New York’s minimum wage hike from $7.25 an hour to $8 an hour actually takes effect Dec. 31. The state’s minimum wage will be the same as Rhode Island’s, which will jump from $7.75 to $8 an hour, and Colorado’s, which is currently $7.78 an hour. Washington state will continue to have the highest minimum wage. It will increase from $9.19 to $9.32 an hour, according to the Employment Policies Institute.
Minimum wage hikes are planned later in the year for California; Santa Fe, NM; and Prince George’s and Montgomery counties in Maryland, the group said. Pending the results of a legal challenge, the minimum wage in the small city of SeaTac, Wash., will go from $9.19 to $15 an hour.
“There is little doubt that raising the minimum wage has disastrous results for the most vulnerable jobseekers,” Michael Saltsman, research director at EPI, said in a statement. “According to economists at the University of California-Irvine and the Federal Reserve Board, 85 percent of the most credible studies on the subject from the last two decades point to job loss following an increase in the minimum wage.”
The federal minimum wage is $7.25. According to RaisetheMinimumWage.com, a project of the National Employment Law Project, the federal minimum wage would be $10.74 an hour if it had kept up with inflation over the past 40 years. RaisetheMinimumWage.com said economists have significantly shifted their opinion of the minimum wage in the past 15 years. “Today, the most rigorous research shows little evidence of job reductions from a higher minimum wage,” the website said.
The Employment Policies Institute said the minimum wage has a “poor track record of reducing poverty.” Studying the 28 states that raised their minimum wage between 2003 and 2007, economists from Cornell University and American University found no associated impact on state poverty rates.
The EPI’s analysis of U.S. Census Bureau data shows most employees who earn minimum wage don’t work at large corporations with more than 1,000 employees. Forty-six percent of employees who make $10 an hour or less work for small businesses with fewer than 100 employees, the group found.
“The research on minimum wage hikes is clear: They reduce job opportunities and do little to reduce poverty,” Saltsman said. “At a time when unemployment for less-skilled job seekers remains above 20 percent, federal, state, and local policymakers should be focused on reducing barriers to employment rather than raising them.”
New York’s minimum wage is scheduled to rise to $8.75 per hour on Dec. 31, 2014 and $9 an hour Dec. 31, 2015, according to Forbes.