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Let's Be Cautious With Local Minimum Wage

by Mark S. Weprin, Jun 05, 2014
 

Mark Weprin

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Council Member Mark Weprin, the author, and his guest council member for a day (William Alatriste)

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During his State of the Union address, President Obama vowed to work with Congress on legislation that would increase the Federal minimum hourly wage from $7.25 to $10.10. A week later, Mayor de Blasio told reporters that he supports legislation that would raise the State's minimum wage from $8 to $10.10 next year. That same bill, now reported to be backed by Governor Cuomo, would also allow local municipalities to set their own rates for the minimum wage.

I agree with the president, the governor and the mayor that the minimum wage needs to be increased. Working families all across the country are struggling to make ends meet and putting more money in their pockets is undoubtedly a step in the right direction. It is outrageous that here, in New York State, retail employees, fast food workers and other minimum wage earners are expected to provide for their families with an $8 hourly wage. The cost of living continues to rise and today's minimum wage is clearly failing to keep up.

At the same time, I have serious concerns about permitting local municipalities to set their own minimum wages. While the concept sounds great in theory, in practice it has the potential to hurt local small businesses and deter businesspeople from opening up new businesses in certain areas of the City.

The Council district I represent encompasses a number of neighborhoods on the Queens County/Nassau County border; the entire district is within a 10-minute drive of Nassau County. Many of my constituents even live within walking distance of the city line. If New York City sets a higher minimum wage, entrepreneurs considering opening businesses in Eastern Queens will have a financial disincentive. Why open a new business in a Queens neighborhood like Floral Park, Glen Oaks, New Hyde Park, or Little Neck when you can simply site the business a few blocks away in Nassau County, where the minimum wage is lower? A similar problem presents itself in neighborhoods across the Northern Bronx, which borders Westchester County, and Staten Island, which is close to New Jersey.

Businesses that are already established in areas on the outskirts of the City will also suffer if the proposed legislation is approved. To compensate for the financial losses caused by minimum wage hikes, business owners will need to increase the prices of their products. Doing so could have a devastating impact on many of the local establishments that operate on thin margins to begin with, as consumers will have cheaper alternatives nearby. The consequences may even be severe enough to put some places out of business.

Raising the minimum wage is a great idea, but we should implement the change for the entire country or at least the whole State of New York. Setting different wages in neighboring cities and towns is a well-intentioned concept that can backfire big time.

***
Mark Weprin is the New York City Council Member for the 23rd council district, in Queens.


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Last Updated (Jun 04, 2014)