Remember what FDR said:
"The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach. We need enthusiasm, imagination and the ability to face facts, even unpleasant ones, bravely. We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer. We need the courage of the young. Yours is not the task of making your way in the world, but the task of remaking the world which you will find before you. May every one of us be granted the courage, the faith and the vision to give the best that is in us to that remaking!"
https://en.wikiquote.org/wiki/Franklin_D._Roosevelt
What's being tried in NY now is kind of radical. It's also going to be a chance for economics to have that rare bird: a natural experiment.
At Nate Silver''s FiveThirtyEight, Ben Casselman games it out:
Fast food workers in New York City might be about to get a big raise. The even bigger news: Workers in Buffalo might, too.
A New York state commission voted Wednesday to recommend the state raise the minimum wage for fast food workers to $15 an hour in New York City by 2018 and in the rest of the state by 2021. If Acting Labor Commissioner Mario Musolino signs off on the recommendation, the new policy will take effect without requiring approval from the state legislature.
Right now, New York’s roughly 180,000 fast food workers are covered by the statewide minimum wage of $8.75 an hour, which will rise to $9 at the end of the year. Most of them don’t make much more than that: According to the state Department of Labor, the median hourly wage for the fast food industry in New York is just $9.03. (In May, Gov. Andrew Cuomo convened a Wage Board empowered by state law to consider raising the minimum for the fast food industry.)
"In recent months, Los Angeles, San Francisco, Seattle and other jurisdictions have adopted $15 an hour minimum wages, generally phased in over several years. Those wage hikes, unlike New York’s, apply to all industries, not just fast food. But in one important way, New York’s proposal is more radical: It applies to the whole state, not just New York City."
http://fivethirtyeight.com/datalab/new-york-minimum-wage-fast-food-workers/
This deals with a very significant problem-that the cost of living varies widely across cities. NYC is the most expensive big city in the country.
"That distinction is critical because, as I wrote earlier this year, it doesn’t make sense to talk about the minimum wage without factoring in the local cost of living. Most of the places enacting big wage increases recently have been coastal cities where living costs – and especially rents – are high. New York City fits that pattern: Adjusting for cost of living, the state’s $8.75 minimum wage is worth less than $7 an hour in the New York City metro area. (The city itself is even more expensive. Using a somewhat different methodology, I estimated that New York City’s minimum wage would be worth less than $5 an hour in the average U.S. city. See the note on methodology below for more details.)"
"But for the businesses that must pay the higher wage, the phased approach doesn’t fully offset the fact that the cost of living is so much lower upstate. Adjusting for both inflation and living costs, the new wage floor in the New York area is the equivalent of about $11.27 in today’s dollars, versus more than $14 in some upstate areas."
"Another way to look at this is to focus on what workers earn now: Near New York City, the median worker (in all industries) earns nearly $22 an hour, compared to under $16 in the Utica area. That means upstate employers would be hit much harder by any wage hike, because far more of their workers would be owed raises."
"Supporters of the wage board’s recommendation say the statewide approach is justified because even in lower-cost areas upstate, $15 an hour is barely enough to support a family."
“There are obviously cost-of-living differences between different areas of the state, but what is clear is that $15 is fairly low in terms of what these workers actually need in order to not be on public assistance,” said Irene Tung, a senior policy researcher with the National Employment Law Project."
That's important: $15 really isn't that much-once you think about taxes. It will be interesting to see what happens. What's clear is that this is going to push wages higher not just in NY but across the country.
"The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach. We need enthusiasm, imagination and the ability to face facts, even unpleasant ones, bravely. We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer. We need the courage of the young. Yours is not the task of making your way in the world, but the task of remaking the world which you will find before you. May every one of us be granted the courage, the faith and the vision to give the best that is in us to that remaking!"
https://en.wikiquote.org/wiki/Franklin_D._Roosevelt
What's being tried in NY now is kind of radical. It's also going to be a chance for economics to have that rare bird: a natural experiment.
At Nate Silver''s FiveThirtyEight, Ben Casselman games it out:
Fast food workers in New York City might be about to get a big raise. The even bigger news: Workers in Buffalo might, too.
A New York state commission voted Wednesday to recommend the state raise the minimum wage for fast food workers to $15 an hour in New York City by 2018 and in the rest of the state by 2021. If Acting Labor Commissioner Mario Musolino signs off on the recommendation, the new policy will take effect without requiring approval from the state legislature.
Right now, New York’s roughly 180,000 fast food workers are covered by the statewide minimum wage of $8.75 an hour, which will rise to $9 at the end of the year. Most of them don’t make much more than that: According to the state Department of Labor, the median hourly wage for the fast food industry in New York is just $9.03. (In May, Gov. Andrew Cuomo convened a Wage Board empowered by state law to consider raising the minimum for the fast food industry.)
"In recent months, Los Angeles, San Francisco, Seattle and other jurisdictions have adopted $15 an hour minimum wages, generally phased in over several years. Those wage hikes, unlike New York’s, apply to all industries, not just fast food. But in one important way, New York’s proposal is more radical: It applies to the whole state, not just New York City."
http://fivethirtyeight.com/datalab/new-york-minimum-wage-fast-food-workers/
This deals with a very significant problem-that the cost of living varies widely across cities. NYC is the most expensive big city in the country.
"That distinction is critical because, as I wrote earlier this year, it doesn’t make sense to talk about the minimum wage without factoring in the local cost of living. Most of the places enacting big wage increases recently have been coastal cities where living costs – and especially rents – are high. New York City fits that pattern: Adjusting for cost of living, the state’s $8.75 minimum wage is worth less than $7 an hour in the New York City metro area. (The city itself is even more expensive. Using a somewhat different methodology, I estimated that New York City’s minimum wage would be worth less than $5 an hour in the average U.S. city. See the note on methodology below for more details.)"
"But for the businesses that must pay the higher wage, the phased approach doesn’t fully offset the fact that the cost of living is so much lower upstate. Adjusting for both inflation and living costs, the new wage floor in the New York area is the equivalent of about $11.27 in today’s dollars, versus more than $14 in some upstate areas."
"Another way to look at this is to focus on what workers earn now: Near New York City, the median worker (in all industries) earns nearly $22 an hour, compared to under $16 in the Utica area. That means upstate employers would be hit much harder by any wage hike, because far more of their workers would be owed raises."
"Supporters of the wage board’s recommendation say the statewide approach is justified because even in lower-cost areas upstate, $15 an hour is barely enough to support a family."
“There are obviously cost-of-living differences between different areas of the state, but what is clear is that $15 is fairly low in terms of what these workers actually need in order to not be on public assistance,” said Irene Tung, a senior policy researcher with the National Employment Law Project."
That's important: $15 really isn't that much-once you think about taxes. It will be interesting to see what happens. What's clear is that this is going to push wages higher not just in NY but across the country.
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