Workers in New York who earn the minimum wage are getting a raise today. The state's minimum wage is now $8.75 an hour, up from the $8 it stood at before. It will fatten the paychecks for 284,000 employees across the state, according to the labor department.
"This is a good thing for workers in New York state. Is it enough? No, it's not enough," said Ron Deutsch from the Fiscal Policy Institute, who argues wages should be be closer to $11 an hour, given inflation.
As part of the 2013 law passed by the legislature, wages will go up another 25 cents at the beginning of 2016. This doesn’t affect tipped workers, for whom a wage hike is currently being studied by the state labor department.
Nineteen other states are upping their minimum wages to start the New Year, and a majority of states in the country now have wage requirements above the federal standard of $7.25.
"Which on the surface sounds like a really good thing, people have more money, they spend more money. But it also impacts the employers cost of doing business," said Gary Hughes with The Business Council of New York.
Hugh says the way to stimulate the economy is to expand the number of people who are working.
"That’s more critical than taking the existing number of people who are working and increasing wages without doing anything on the other side to increase demand," he said.
The Business Council supported this wage hike, but is opposed to further raises. Advocates of higher wage standards say a raise will pump more money into a consumer-driven economy and ease the burden on other social services.
"By going up to 8.75 an hour, we’ll probably generate an additional billion dollars in new consumer spending and that could create somewhere around 8,000 new full time jobs across the state," Deutsch said.
Some state lawmakers have called for the state’s minimum wage to go up even more, to $10.10 an hour, the same level President Barack Obama supports. But non-partisan federal studies conclude a federal minimum wage that high would result in at least a half-million jobs lost due to higher labor costs.