New York minimum wage hike: Will it happen as scheduled on Dec. 31?

New York State Team

The state is set to raise it's minimum wage by $1 on Long Island and Westchester County and by 70 cents everywhere else on Dec. 31.
Business groups are calling for a temporary suspension of the increase, saying the increase will further hit businesses strangled by the pandemic.
Workers' rights group say the wage hike will be good for minimum wage workers who've been expecting it, and who were potentially laid off in the spring.

New York’s minimum wage is set to increase on Dec. 31 unless Gov. Andrew Cuomo's office steps in, touching off a debate over whether businesses can handle the hike during the COVID-19 pandemic.

A state law approved in 2016 laid out a tiered schedule of annual minimum wage increases through at least 2021, depending on which part of the state the worker is in. But the law included an escape valve, allowing Cuomo's Budget Division to pause planned increases if the economy took a turn.

On Dec. 31 of this year, workers across most of the state are expected to see their hourly wage to increase from $11.80 to $12.50, a 70-cent hike.

Workers on Long Island and in Westchester County will see a $1 increase from $13 to $14, while New York City workers, who make $15 an hour, will see no change.

Julia McCue, owner of Horsefeathers, chats with employee Luis Neives at the restaurant March 20, 2020 in Tarrytown, NY. Many businesses are adapting to stay afloat during the coronavirus pandemic. McCue has been working on adding online ordering for takeout and curbside pickup to minimize contact as many businesses adapt to stay afloat during the coronavirus pandemic.

But Republican lawmakers and some business organizations say the immense strain felt by businesses weathering the COVID-19 pandemic should be cause enough for the state to pause the increase this year.

“We believe that any increase to the minimum wage will have great and far-reaching consequences for businesses that are only barely staying afloat in the current state of the pandemic,” read a letter from eight New York senators, including Senate Minority Leader Robert Ortt, sent to Gov. Andrew Cuomo on Wednesday.

The letter was met with fierce outcry from unions and other groups, who argued workers have been hit the hardest by the pandemic’s economic effects.

Proponents of minimum wage increases have long argued a higher wage is beneficial because workers end up spending more money on goods and services, pumping more into the economy.

Two patrons have lunch at the Jay Street Cafe in Katonah Dec. 9, 2010. Christina and Matt Safarowic, owners of the restaurant, say that after struggling through the early days of the COVID-19 pandemic, they had a successful summer as patrons flocked to the restaurant and sat outdoors. They say they are very concerned about their business if the current increase in coronavirus cases leads to another shutdown.

“This shortsighted proposal (to pause the increase) is clearly out-of-touch with the struggles of workers trying to survive in this crisis,” said Mario Cilento, president of NYS AFL-CIO, a federation of 3,000 unions in New York representing 2.5 million members.

“As if the hardship and devastation of the coronavirus isn’t enough, now they want to deny workers what they have been promised – a long overdue minimum wage increase that finally begins to address poverty and income inequality across this state.”

A temporary suspension or delay of a wage increase would be in the hands of the commissioner of the Department of Labor, following an economic analysis and recommendation from the Governor’s Division of the Budget.

The provision allowing for a pause took effect last year. In a report outlining its rationale, the Budget Division pointed to the state's low unemployment rate at the end of 2019, saying it showed employers were able to absorb the higher minimum wage without an adverse impact on employment.

Cuomo's Budget Division has not yet weighed in on the pending Dec. 31 increase. A spokesman did not immediately respond to a request for comment.

FILE - In this Tuesday, Nov. 17, 2020 file photo, manager Yllka Murati waits for a delivery driver to pick up takeout orders behind a partition displaying a sign to remind customers to wear a mask, at the Penrose Diner, in south Philadelphia. Despite the expected arrival of COVID-19 vaccines in just a few weeks, it could take several months Ñ probably well into 2021 Ñ before things get back to something close to normal in the U.S. and Americans can once again go to the movies, cheer at an NBA game or give Grandma a hug. (AP Photo/Matt Slocum, File)

The increases aren’t sustainable based on current labor and unemployment data, argued E.J. McMahon, a senior fellow at Empire Center for Public Policy, a fiscally conservative think tank based in Albany.

McMahon called the state's 2019 analysis “remarkably flimsy, misleading and superficial,” saying that the findings were based mainly on the unemployment rate, when they should have considered payroll and other establishment data over time.

But even if the state used unemployment data to support a wage increase this year, the data doesn’t look good.

“Based on using the same standard, they can’t possibly find grounds for it,” McMahon said.

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Sarah Taddeo is the consumer watchdog reporter for USA Today Network's New York State Team. Got a story tip or comment? Contact Sarah at STADDEO@Gannett.com or (585) 258-2774. Follow her on Twitter @Sjtaddeo. This coverage is only possible with support from our readers. Please consider becoming a digital subscriber.