Gradual hike makes sense

The minimum wage in the state is likely to increase – by how much and when is still up in the air.

Three possibilities currently are out there: Gov. Andrew Cuomo’s proposal to raise the minimum wage from the current $7.25 an hour to $8.75 on July 1; the state Assembly’s bill for an increase to $9, with indexing to inflation thereafter; and President Barack Obama’s proposal for a gradual increase in minimum wage to $9 by 2015, followed by indexing.

State Senate Republicans have been getting feedback from businesses, such as farms and summer camps that hire young workers, about the effects of a minimum- wage increase, said Peter Edman, a spokesman for state Sen. Hugh Farley, R-Niskayuna. He said several ideas are being discussed to cushion businesses, including phasing in a minimum-wage increase, tax credits for businesses, a training wage for inexperienced workers, changes in workers’ compensation or unemployment insurance, and aiding lower-income people via a higher earned-income tax credit.

Edman said both houses of the Legislature should have budget bills on the table Monday, but whether the wage increase becomes part of the budget or is discussed separately in May or June is still up in the air.

The minimum wage has been a contentious issue since it first was established under President Franklin Roosevelt in the Fair Labor Standards Act of 1938. The fundamental philosophical debate is about whether government should intervene in the free market to set a minimum wage. Currently, the question centers more on whether an increase in the minimum wage as an aid to lower-income workers is a stimulant to the economy or a depressant that burdens businesses, thereby reducing the number of people hired or retained and forcing up the prices of goods and services.

These issues have been debated ad infinitum, with each side marshaling study after study and survey after survey.

Whatever minimum-wage increase is chosen should not be abrupt. Any changes should be gradual, so the economy, which is struggling, can absorb predictable increases.

Indexing the minimum wage – which involves automatic annual increases related to the cost of living – would make the program something like an entitlement, such as Social Security.

Legislators should support a gradual minimum-wage increase over several years, but they should reject any plan for automatic increases tied to the cost of living.