Mandating Higher Wages Equals Higher Unemployment

A Legislative Column from Assemblywoman Claudia Tenney (R,C,I-New Hartford)
May 17, 2012
We all want New Yorkers to see an increase in their wages. However, that increase should be derived as a result of a strong economy, not a government mandate.

Small family-owned businesses are the heart of New York’s economy and employ most New Yorkers. New York is struggling because our small family-owned businesses are saddled with unfunded mandates, an oppressive regulatory structure and high taxes, such as payroll taxes, MTA workers’ compensation, income taxes, property taxes and countless fees, which have forced them out of New York state or out of business altogether.

As a small-business owner, I voted against the Speaker’s job-killing minimum wage hike. The bill proposed a 17 percent increase in the state’s minimum wage, with future wage increases linked to the consumer price index, and will make New York the highest wage state among neighboring states in the Northeast and the third highest in the country.

Only one percent of the New York State labor force earns the minimum wage, half of whom are under the age of 25. The increased cost on employers to make up for across-the-board wage hikes will result in job cuts. Instead of helping New Yorkers, our young people will be losing valuable opportunities to find part-time employment to develop strong work ethics and learn the importance of financial responsibility.

The 2004-06 minimum wage increase in New York accounted for more than a 20 percent reduction in the employment of low-wage-earning 16- to 29-year-olds without high school diplomas. This state cannot afford a similar scenario now, when 53 percent of college graduates under 25 years of age are currently unemployed or under-employed.

A strong market-driven competitive economy will provide a true increase in the minimum wage – not an artificial wage rate based on a government mandate.