Numerous Independent Studies Prove Increasing the Minimum Wage Does Not Create Job Loss

NEW YORK, NY (03/02/2023) (readMedia)-- As New York State lawmakers negotiate two minimum wage proposals to address New York's cost-of-living-crisis, the National Federation of Independent Business (NFIB) released a misleading report analyzing the potential impact of the Raise the Wage Act, which would raise New York's minimum wage to at least $21.25 statewide by 2027. Numerous independent studies convincingly show raising the minimum wage does not result in job loss - including five recent studies analyzing New York State's $15 minimum wage. Yet, the NFIB report conducted by Regional Economic Models Inc. (REMI), used archaic models which assume that a certain degree of job loss is to be expected when increasing the minimum wage. That's a baked in flaw.

"The REMI analysis cites 40+ year old economic studies that ignore scores of scholarly research that have vastly improved our understanding of the true impacts of minimum wage increases. Recent studies by economist Michael Reich at UC Berkeley and by economists at the Federal Reserve Bank of New York have examined the impacts of minimum wage increases in New York State in comparison to other states that have not implemented minimum wage increases: they convincingly demonstrate that New York's minimum wage increases did not have any negative effects on job growth. The REMI analysis ignores the real world manner in which minimum wage increases operate, reducing worker turnover, recruitment and training costs, and increasing worker productivity in addition to raising consumer purchasing power," said James Parrott, Director of Economic and Fiscal Policies at the Center for New York City Affairs.

There have been a total of five independent studies of the impact of New York's $15 minimum wage-by researchers at the Federal Reserve Bank of New York, the University of California at Berkeley, Columbia University, the New York City Comptroller, and the Center for New York City Affairs at the New School together with the National Employment Law Project. All five found that New York's 2016 legislation, which raised the minimum wage to $15, led to historic reductions in poverty and earnings inequality in New York without hurting job growth. In fact, both upstate and down, jobs in New York grew at least as fast, and in many cases faster, than they did in similar counties in states that didn't raise the minimum wage during that period. Raising the minimum wage also boosted sales at local businesses across New York and helped businesses keep their employees, saving them recruitment and retention costs.

One of those studies includes the Institute of Research on Labor and Employment at the University of California, Berkeley report (attached) analyzing the effects of New York's $15 fast food minimum wage and any possible correlation to automation and job loss. Unlike the general minimum wage, which has been inching up to $15 upstate, the upstate fast food industry has been covered by a $15 minimum wage since 2021. Since fast food is one of the most underpaid and most labor-intensive occupations, any job losses associated with a higher minimum wage would be evident in that industry. However, the UC Berkeley study found that both upstate and down the New York fast food industry grew at least as fast or faster than in other states that didn't raise the minimum wage. Additionally, there was no correlation between wage increases and increased automation. The fact that New York's $15 fast food minimum wage did not hurt job growth indicates that a $21.25 state-wide wage by 2027 is unlikely to do so.

The Federal Reserve Bank of New York released a study in 2019 examining job growth in neighboring counties along the New York and Pennsylvania border over the span of five years. At the time of the study, the upstate minimum wage was $11.10 and $12.75 for fast food workers-roughly $4 to $5 higher than the $7.25 Pennsylvania minimum wage. The study found that worker earnings increased significantly in New York, while job growth trends in restaurants and retail-two heavily affected low-wage industries-remained similar in the two states.

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Raise Up NY is a coalition of workers, labor, community, and businesses-including ALIGN-NY, Business for a Fair Minimum Wage, Caring Majority, Churches United for Fair Housing, Citizen Action of New York, Columbia County Sanctuary Movement, Community Voices Heard, Construction and General Building Laborers' Local 79, CWA D1, For the Many, Greater Hudson Promise Neighborhood, Hand in Hand: The Domestic Employers Network, Hotel and Gaming Trades Council, Human Services Council, Indivisible Nation Brooklyn, Jews for Racial and Economic Justice, Legal Aid New York, Legal Momentum, The Women's Legal Defense and Education Fund, Long Island Jobs with Justice, Make the Road NY, National Employment Law Project, New York Communities for Change, Northeast NY Coalition for Occupational Safety and Health, Partnership for the Public Good, Retail Action Project, RWDSU, SEIU 32BJ, SEIU Local 200United, 1199SEIU, Strong Economy for All Coalition, Sunnyside Community Services, Teamsters Joint Council 16, Teamsters Local 804, Tompkins County Worker Center, UAW Region 9, UAW Region 9A, Western New York Council on Occupational Safety and Health (WNYCOSH), Alianza Agrícola Labor-Religion Coalition of NYS, ROC United, Family Values @ Work, New York State Public Affairs Committee of the Junior Leagues, League of Women Voters of St. Lawrence County, NY, National Institute for Reproductive Health, Oxfam America, Equal Rights Advocates, Mekong NYC, National Women's Law Center, Girls for Gender Equity, NYSPAC, National Federation of Business and Professional Women's Clubs-NYC, Citizens' Committee for Children, A Better Balance, Gender Equality Law Center, Her Justice, National Domestic Workers Alliance, Workers Center of Central New York, Worker Justice Center of New York, and Workers United - that backs legislation, which would raise New York State's minimum wage and ensure there are annual minimum wage increases so that it won't fall behind ever again.