A new study by economists at the University of California-Berkeley predicts that raising New York state’s minimum wage to $15 would improve the living standards of more than 3 million people but would lead to price increases and higher jobless rates.
The report estimates that raising wages from $9 an hour would give the average affected worker $4,900 more annually. They concede that higher labor costs could slow job growth and that prices will go up somewhat, but expect those adverse effects to be tempered by increased spending in local economies and less reliance on government assistance.
“A restaurant customer may pay 30 cents more for a hamburger, but the restaurant worker will get paid a whole lot more,” said Michael Reich, a Berkeley economist who was one of the report’s authors.
Gov. Andrew Cuomo has proposed gradually raising the minimum wage to $15 by the end of 2018 in New York City and by July 2021 elsewhere in the state. The Legislature is expected to vote on this in the coming weeks.
Much of the debate so far has been highly polarized, with labor groups predicting the increase will have little impact on business while business owners warn of higher prices, layoffs and increased automation.
Michael Jubie, who owns Headless Horseman Hayrides, a popular Hudson River Valley tourism attraction, as well as three other small businesses, said a $15 wage will put him at a competitive disadvantage with other states.
“We bring in 60,000 people a year,” he said. If he’s forced to raise prices significantly, “they’re going to go somewhere else.”