New York Governor Kathy Hochul is proposing automatic increases to the state’s $15-an-hour minimum wage to keep pace with inflation.
(Bloomberg) — New York Governor Kathy Hochul is proposing automatic increases to the state’s $15-an-hour minimum wage to keep pace with inflation.
The monthly cost of goods and services for households has risen by 13.4% since October 2020, while the purchasing power of the $15 minimum wage has lost $1.78, making it tougher for low-income families to shop for groceries and fill up at the pump, according to the Democratic governor.
“Indexing our minimum wage to inflation will ensure that the purchasing power of workers’ wages aren’t eroded year over year,” Hochul said in her State of the State executive book released Tuesday. “New York State can and must have their backs by ensuring inflation can’t take any more out of their paychecks.”
Progressive lawmakers in Albany have been pushing to link the minimum wage to an inflation formula, but the proposal is likely to face resistance from business groups. Assembly Speaker Carl Heastie on Monday said he’s in favor of making sure the minimum wage keeps up with the cost of living, but he declined to say whether he supported raising it this year.
After reaching $15 per hour, each region’s minimum wage would increase year-over-year with the state’s best regional measure of inflation. To minimize pressure on businesses, annual pay increases would be capped, and an “off ramp” could be used during rockier economic times. No further details were provided in the governor’s proposal.
New York wouldn’t be the only state to index the minimum wage to inflation, a policy that has led to reductions in poverty. Seventeen other states either currently tie the minimum wage to inflation or some other economic formula, or plan to do so, according to the governor’s office.
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