April 3, 2012

Honorable Dean G. Skelos Temporary President and Majority Leader New York State Senate State Capitol Room 330 Albany, New York 12247

Dear Senator Skelos: I am writing in response to your recent comment that the proposal to raise the state’s minimum wage above $7.25 per hour is a “job killer.” I wholeheartedly disagree and hope this will be one of the top items of legislative business now that the state budget for 2012-2013 has been enacted. Not only is it the right thing to do for the citizens of our state who are struggling to get by, it is actually better for our economy as well. For nearly 20 years (1962-1979), the New York minimum wage has meant on average 108 percent of the federal poverty line for a family of three. Since then, our lowest paid workers have fallen far behind. The current $7.25 hourly minimum translates into just 82 percent of the federal poverty level for that same family – a level that should hardly be a source of pride for our state. Increasing the minimum wage to just $8.50 (and arguably it should be higher) would benefit approximately one million workers – about 11 percent of the State’s workforce – and lift the annual wages of full-time minimum wage worker to 95 percent for that 3-person family. Not only will raising the minimum wage help lift families out of poverty, linking the minimum wage to the Consumer Price Index (CPI) would permanently maintain the purchasing power of minimum wage households, which will in turn create jobs. According to a 2009 study by the Chicago Federal Reserve, total spending by minimum wage households increases by over $3,200 per year after a $1 increase in the minimum wage. This is because each increase provides financial relief directly to the workers and their families. By increasing their take-home pay, families gain both financial security and an increased ability to purchase goods and services – thereby creating jobs. Many of those jobs will be right in the local communities where the wage earner lives and works. A large majority of minimum wage workers are employed in retail trade, in food services or a range of other services that cater exclusively to local customers. Moreover, the Chicago Federal Reserve noted in its study that affected households tend to increase collateralized debt in response to a wage increase – purchasing items such as cars and durable goods, which reach

beyond the local community to businesses throughout the State. The ripple effect of raising the rate to $8.50 would be significant enough to create roughly 7,500 new jobs in New York State. To date, 19 other states have recognized that the federal minimum wage is simply too low for people to survive on, even with food stamps or other government assistance, and lawmakers in both Massachusetts and Connecticut have raised their states’ minimum wages accordingly. Both states outpaced the national economy last year, and both are considering raising their rates again this year. Support for doing so in our state ranges across the economic spectrum. The Business and Labor Coalition of New York (BALCONY), a diverse coalition of interests ranging from CSEA and PEF to the Greater New York Chamber of Commerce and the Small Business Majority, recognizes that assuring a living wage for those near the bottom is an essential part of the rising tide that lifts all boats. As Mayor Bloomberg said in his State of the City Address in support of raising the rate, “…the genius of the free market is not always perfect.” A member of your conference recently implied that the 2005-2007 increases to the state’s minimum wage are somehow responsible for the worst national recession in generations. I hope you will agree that blaming the powerless is cynical and unproductive. I sincerely hope you will reconsider your position and take action to raise the minimum wage this year. I look forward to working with you and your conference to bring jobs and financial relief to thousands of working families.

Very truly yours,

Senator John L. Sampson Minority Leader

cc:

Governor Andrew Cuomo Assembly Speaker Sheldon Silver Assembly Minority Leader Brian Kolb