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Potential framework deal on minimum wage decried by supporters and opponents

Posted by Karen DeWitt on

Supporters and opponents of a $15 minimum wage in New York are blasting reports that Governor Cuomo and state lawmakers have reached a compromise that could stretch out the phase in period, and exempt farmers from the higher pay requirements. 

With the March 31 deadline looming, and the Easter holiday in between, Governor Cuomo and the Senate and Assembly are trying to negotiate a compromise on the governor’s proposal to phase in a $15 minimum wage for New York State.

Word spread of a possible deal to stretch out the phase in to $15 to up to nine years for upstate regions. Backers of  the governor’s plan for a five year phase in are dismayed.

Ron Deutsch is with Fiscal Policy Institute, a think tank that received partial funding from the Governor’s own campaign to raise the minimum wage, named after his father, the late former Governor Mario Cuomo.

“The rumor mill is flying right now,” said Deutsch, who says his group would “prefer a six year phase in period.”

The group Citizen Action says a longer phase in would “condemn upstate to poverty”.

Assembly Speaker Carl Heastie told reporters earlier in the week that he’s against a lengthy stretch out of the minimum wage increase, saying he doesn’t want a deal where “none of us will be here by the time it gets to $15”.

“We’re not going to accept a minimum wage proposal that would be an insult to our principles,” Heastie said.

Senate Republicans are concerned that businesses, particularly smaller employers, won’t be able to afford what would amount to a two thirds increase in pay for workers, from the current $9 an hour to $15, in just six years.  

Senate Leader John Flanagan says discussions over the minimum wage also include cutting business regulations and more  tax cuts, and mitigating high costs for workers compensation  and unemployment insurance.

“What’s the right way to approach these things, and with some type of balance,” Flanagan said. “Clearly we have differences that I think at the end of the day will be resolved.”

Senator Flanagan says a lower wage rate than $15 for parts of upstate and even Long Island is also under discussion.

The State’s Business Council, which is against the minimum wage increase, issued a last minute plea to Cuomo and lawmakers as budget deals are struck , saying “first, do not harm”. The Council’s Zack Hutchins says the $15 an hour phase in amounts to an over $15 billion dollar tax on the state’s employers.  

“We’re not talking about larger corporations here,” Hutchins said. “We’re talking about the pizza shop around the corner that is already pinching pennies in order to survive.”

Farmers have joined with the business groups to oppose the minimum wage increase.

But Governor Cuomo offered a carve out from the $15 minimum wage for farmers, though he provided no details.

“There are special conditions on farms, we understand that,” Cuomo said  after an event in Niagara Falls. “And we’re putting together a special package for farmers. Because they pose a unique problem.”

The state’s Farm Bureau rejected the idea, though, saying if farmers were allowed to pay a lower wage, they would still be hurt by competition with other industries, who under a new law, would be paying their workers more money.

There’s also the question of how a nine year phase in of the minimum wage would mesh with an already scheduled minimum wage increase for fast food workers. A wage board controlled by Cuomo approved a $15 minimum wage by 2018 for New York City and 2021 for the rest of the state. 

Deutsch, with Fiscal Policy Institute, says that leads to another question.

“Does the legislature have the ability to supersede what was done through the wage board, or not ,” Deutsch asked.

Senate Republicans want to outlaw the wage boards, which they say Governor Cuomo used to get around their objections to raising the minimum wage. Assembly Democrats have so far not publicly agreed.

Politically it would be difficult to take away benefits already promised to the fast food workers, supporters say.

There’s also another so far unresolved issue concerning the minimum wage. Not for profit groups that contract with New York to provide services like home health care and aid to the disabled say Medicaid payments from the state need to rise if they are ever to afford the minimum wage increase. Governor Cuomo has said there’s no precedence for that. 

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