NYS Minimum Wage Coalition Praises Path to Raise for Tipped Workers, Condemns “Walmart Tax Break”

New York State Minimum Wage Coalition

For Immediate Release: March 28, 2013

Contact: Jack Temple, jtemple@nelp.org, (734) 395-8441

 

New York State Minimum Wage Coalition Comments on Agreement to Raise New York’s Minimum Wage

Praises Path to a Raise for New York’s Tipped Workers, But Condemns Wasteful Tax Give-away to Multi-Billion Dollar Chains

New York, NY – Labor, business, community, religious and policy groups from around the state reacted to the agreement by the legislature and Governor Cuomo to increase New York’s minimum wage over the next three years, as part of the state budget being voted on this week. 

The agreement includes a commitment that Governor Cuomo will use the Department of Labor wage board process to determine the appropriate raise for thousands of tipped restaurant workers whose base wage – currently $5.00 per hour – will not automatically be raised under the budget deal.

After historic leadership from Assembly Speaker Sheldon Silver, a clear commitment from Governor Andrew Cuomo in his State of the State speech, and strong backing from Assembly and Senate members, including Senate Co-President Jeff Klein and Senate Minority Leader Andrea Stewart-Cousins, the final minimum wage increase legislation was negotiated this weekend, with a strong push from Assembly negotiators.

“We thank Assembly Speaker Sheldon Silver for showing leadership in originally calling for and continually fighting for an increase in the minimum wage.  Many low-wage workers will benefit from the Assembly’s efforts.  However, while we regret that more wasn’t done, we understand that the Speaker and the Assembly were hamstrung by a political process where they had to contend with other partners whose agendas ignored many of the needs of  hardworking low-wage workers.  We are incredibly disappointed in the creation of a dangerous tax credit which subsidizes the minimum wage increase for large retailers like Walmart at a time when there are substantial funding cuts to essential services. The tax credit creates harmful incentives to replace adult workers with younger part time students, and imposes an unprecedented ceiling on wages, since employers are penalized if they pay younger workers more than exactly the minimum wage,” said Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union.

“Albany has finally acted -- for the first time in nine years -- to raise the wages of the lowest-paid New Yorkers, and that's a good thing,” said Hector Figueroa, President of 32BJ SEIU.  “We're glad that a million and a half workers will be getting a raise, and we're glad we won the fight to make sure tipped workers were included in this bill.  We're angry that Senate negotiators extracted an undeserved and unneeded subsidy for huge corporations as the price for helping workers, and we'll work to end that subsidy in the future.”

“The increase in New York’s minimum wage is a victory for working people. It's a significant step towards addressing income inequality in New York, which has the worst disparity of any state. Over a million and a half New Yorkers need this raise to help pay the rent and feed their families, and our economy needs this boost,” said George Gresham, President of 1199SEIU United Healthcare Workers East, the largest healthcare union in New York State and the nation.

“I’m proud to be a New Yorker,” said Michael Mulgrew, president of the United Federation of Teachers.  “New York is once again showing the rest of the nation how to deal with one of the greatest threats to Democracy - income inequality.”

Pat Purcell, assistant to the president of United Food and Commercial Workers Local 1500 said, “While the calendar may read  March, it might as well be December because Walmart just received one hell of a Christmas gift, “ said Patrick Purcell, Assistant to the President of UFCW Local 1500.  Walmart’s irresponsible business practices have been well documented and this tax subsidy will have Walmart executives working around the clock figuring out ways to get rid of long term older workers and exploit younger workers. We are thrilled and grateful to all parties for the minimum wage hike and thankful that a path to correct tipped workers wages has been addressed but the ‘Walmart Needs a Tax Break’ portion of the agreement must be repealed immediately.”

As part of the agreement, Senate negotiators demanded the creation of a wasteful tax credit give-away, which will give low-wage employers like Walmart and McDonalds millions in taxpayer funds, and create dangerous incentives for employers to replace adult workers with teens and to keep teens at the minimum wage and not a dime more.   [For more detail on this unprecedented tax credit, see Fiscal Policy Institute, “The Many Problems with New York’s Proposed Minimum Wage Reimbursement Credit.”]

Tipped Wage“This long overdue raise will help 1.5 million hard-working New Yorkers and generate thousands of new jobs across the state as they spend their paychecks at local businesses.  After concerns that tipped workers would be left out, we’re pleased that the final agreement includes a path to a raise for the struggling tipped workforce, which is mostly women and workers of color.  The entire coalition is committed to organizing around the wage board to ensure that New York’s tipped wage is kept at its current 69% or higher,” said Paul Sonn, Legal Co-Director of the National Employment Law Project.

Deborah Axt, Co-Executive Director of Make the Road New York said “Thousands of Make the Road members are tipped workers who were nearly left behind in the minimum wage deal. In the end, we are extremely grateful that the final package includes a path to win an increase for all workers and thank the Assembly for aggressively working to make that happen.  

“Further, we thank the Governor for his commitment to making the wage board process fair and efficient with regards to the implementation of a raise for service workers who rely on gratuity. We look forward to working with the executive branch to ensure that the wage board process is effective and just,” said Axt.

Currently New York’s tipped wage is 69% -- the same standard that the Democrats in Washington, including Senators Schumer and Gillibrand, are pushing for the whole nation under the Fair Minimum Wage Act of 2013.  Under New York’s wage board system, Governor Cuomo’s Labor Commissioner Peter Rivera is authorized to convene a board to investigate and report on the adequacy of New York’s tipped minimum wage, and then issue an order raising the tipped wage.

“This will ultimately put over a billion dollars more into the paychecks of 1.5 million workers in New York -- and there’s a clear path to an increase for tipped workers, a fight we fought and won in the last week,” said Michael Kink, Executive Director of the Strong Economy for All Coalition.  ”New Yorkers will see that our economy will be stronger when working families have more to spend at local businesses -- we’ll want to do more for low-wage workers in the future.”

“We are pleased that the low-wage worker communities we serve across the state will receive a much needed raise that they deserve. The minimum wage increase put forth in the Governor’s budget is a necessary step in the right direction and one that will make it easier for hundreds of thousands of New Yorkers to meet their basic daily needs.  The addition of a requirement that the Governor address tipped workers’ wages through a DOL Wage Board was a crucial addition to address a major hole in the initial proposal.  We hope to work closely with our Coalition partners to ensure the DOL Wage Board, charged with addressing these gaps, plays its part to achieve a solution that results in an equal wage floor for all workers,” said Milan Bhatt, Co-Executive Director, Worker Justice Center of NY.

“Clergy, faith leaders, and congregations throughout New York State fought long and hard to win the critical raise for New York’s lowest paid earners that our diverse faiths demand. The deal reached in Albany takes steps toward ensuring that all workers are paid fairly for their labor and we applaud both Governor Cuomo and Speaker Silver on their leadership in making this happen. We absolutely oppose compromises including the discriminatory business tax credit that provides preference for teenage hires, but at the end of the day New York’s lowest paid workers are getting a raise and that’s a good thing. Faith communities will continue the fight until all working New Yorkers earn a living wage,” said Sara Niccoli, Executive Director, Labor-Religion Coalition of NYS.

“While we were aiming for immediate raises for tipped workers, we understand that the agreement includes a path to a raise for this group of workers. We will focus on making the Wage Board process responsive to the needs of tipped workers, and are committed to reminding our policymakers of the high poverty rates facing the hundreds of thousands of tipped workers in New York, who are overwhelmingly low wage working women and people of color,” Daisy Chung, Executive Director, Restaurant Opportunities Center of New York,” Daisy Chung, Executive Director, Restaurant Opportunities Center of New York.

“Women are the majority of tipped workers and about 70 percent of restaurant servers, whose poverty rate is triple that of the workforce as a whole.  Keeping a strong tipped minimum wage is critical for women’s pay equity, which is a top priority for women’s groups nationally, and we’ll be following closely what Governor Cuomo’s wage board does on this important issue, said Julie Vogtman, Senior Counsel at the National Women’s Law Center in Washington, D.C.

Walmart Tax Credit.  “It is very good news that 1.5 million New Yorkers stand to receive a badly-needed raise, but it is just terrible that the state has linked the deal to the creation of new, and perverse, tax subsidies for Walmart, and other mammoth multinational corporations, that will result in the state, as opposed to big business, bearing the cost of many of these raises,” said Andrew Friedman, Executive Director of the Center for Popular Democracy.   

 ”What was initially billed as something that small business needed has turned out to be a blank check for the Walmarts of the world. In its perverseness, it rewards employers who don’t reward their workers by keeping them right at the minimum wage. It’s also an invitation to substitute teenagers for low-wage adults struggling to support their families. This tax credit is the epitome of legislative dysfunction,” said James Parrott, Chief Economist and Deputy Director at the Fiscal Policy Institute. 

Deborah Axt of Make the Road New York also said “We are extremely dismayed at the inclusion of the accompanying tax credit giveaways to Walmart and big business, which will incentivize them to displace adult workers with younger workers earning barely minimum wage with no scheduled salary increase. These perverse incentives will disproportionately impact Latino communities and women and are unacceptable in current form. This tax credit must be repealed immediately.”

“This minimum wage deal is a perfect example of what happens when business interests are favored over the needs of hard-working taxpayers,” said Camille Rivera, executive director of UnitedNY. “Providing tax incentives for companies to promote age discrimination is a slap in the face to the men and women who are working and still struggling to make ends meet. This deal’s saving grace is that tipped workers will see their wages increased, but even this move will be done on the backs of taxpayers. New York must do better, and we are committed to keep fighting for fair wages for all of its workers.”

“Raising wages for 1.5 million workers is an important step to reduce inequality and raise the living standards of the poorest New Yorkers. But that the tax credit provisions demanded by the Senate are terrible policy, a bad precedent, and a totally unwarranted subsidy to giant corporations like Wal-Mart and McDonalds whose business model is built on impoverishing its workforce,” said Bill Lipton, Deputy Director of the Working Families Party.

“Walmart, McDonalds and all the other powerful companies who choose to pay workers poverty wages will be laughing all the way to the bank with their new taxpayer-financed handout,” said Melanie Beam, President of Capital District Local First, an independent business alliance. “It’s bad enough these corporations undermine our economy and misuse the public safety net by paying employees too little to make ends meet. Now they are getting a bribe to pay workers more than $7.25 an hour, which is what responsible businesses already do all around the state.”

New York’s minimum wage boost also comes one month after Congress introduced the Fair Minimum Wage Act of 2013, which would raise the federal minimum wage from $7.25 to $10.10 by 2015 and index it to inflation. Nearly 140 House of Representative members and 28 Senators have already signed onto this legislation as co-sponsors.  [See NELP fact sheet for key background and bill information].

Raising New York’s minimum wage also won support from leading business voices across the state, including  New York City Mayor Michael Bloomberg and Crain’s New York Business – which editorialized strongly in support of raising the minimum wage, and pointed out that past predictions of slower growth or jobs moving across state lines in response to raising the minimum wage did not materialize. Hundreds of individual businesses and trade associations such as Costco, ABC Home, and the Greater New York Chamber of Commerce, also supported raising New York’s minimum wage. 

The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high.  Last month, leading economists surveyed by the University of Chicago agreed by a 3-to-1 margin that the benefits of raising and indexing the minimum wage outweigh the costs.  A new study by the Center for Economic and Policy Research reviews the past two decades of research on the impact of minimum wage increases on employment and concludes that “the weight of the evidence points to little or no effect of minimum wage increases on job growth.”

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The New York State Minimum Wage Coalition is a collection of labor, community, policy and religious groups pushing Albany to raise the minimum wage. It includes the National Employment Law Project, Alliance of Communities Transforming Syracuse, ALIGN, Business for a Fair Minimum Wage, Bronx Clergy Roundtable, Central New York Labor Federation , Center for Popular Democracy, Citizen Action of New York, Clean Air Coalition of Western New York, Coalition for Economic Justice (WNY), Communications Workers of America, Community Service Society of New York, Community Voices Heard, CREDO Action, Fight for Fair Economy Table, Fiscal Policy Institute, Gamaliel of New York, Hudson Valley Community Coalition, LaFuente, Hunger Action Network, Latino Justice PRLDEF, Latino Pastoral Action Center, Laundry Workers Center United, Long Island Jobs with Justice, Make the Road New York, Metro Justice, Micah Institute at the New York Theological Seminary, Moms Rising, NAACP, New York City Coalition Against Hunger, New York Communities for Change, New York State Council of Churches, New York State Episcopal Public Policy Network, New York State Interfaith Impact, New York State Labor-Religion Coalition, New York State NAACP Conference, Occupy Albany, Occupy Faith, Partnership for the Public Good, Retail Action Project, Retail, Wholesale and Department Store Union, Restaurant Opportunities Center of New York, Service Employees International Union Local 32BJ, Service Employees International Union Local1199, Service Employees International Union Local 200, Strong Economy for All, Tompkins County Workers’ Center, United Auto Workers, United Federation of Teachers, United Food and Commercial Workers Local 1500, UnitedNY, Uri L’Tzedek, Voice-Buffalo, Worker Center of Central New York, Worker Justice Center of New York, and the Working Families Party

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