With less than two weeks to go before the State budget is due, one of the most contentious issues remaining is whether the state’s minimum wage should be increased to $15 an hour. This issue does not have to be included in this year’s budget, but rather could be accomplished in a standalone bill. However, the Governor and the Assembly Majority, which is dominated by Downstate legislators, believe their best chance of instituting the 67% increase in the minimum wage is to include it in the budget. This way, legislators who may be opposed to such a substantial increase in the minimum wage would be forced to vote for it or otherwise vote against other priorities such as increasing school aid or middle class tax cuts which they support. It is unfortunate that strong-arm politics are playing such a role. Whether to increase the minimum wage is a serious issue that should rise or fall on its own merit and should be considered outside the state budget.

Constituents who have reached out to my office on the proposed $15 an hour minimum wage proposal have been overwhelmingly opposed. Granted, the majority of those who have contacted me have been small business owners who likely will be the most negatively affected by such a substantial increase. Indeed, my office sent out a survey to business owners within my district and of the nearly 100 responses we received back, approximately 90% of those opposed the increase. About 64% said that the wage hike would either force them to lay off workers or worse, force them to close their doors.

My office has also heard from not-for-profits, particularly in the healthcare field, who rely on government funding for revenue. They have indicated that unless we increase funding for them in tandem with the mandated wage increase (mainly through Medicaid reimbursement), they will not be able to provide the services they currently provide to our community. Farmers, who traditionally have very tight profits margins, have also been vocal in their opposition to the $15 an hour minimum wage. The New York Farm Bureau says New York farmers will not be able to compete if their labor costs are drastically higher than those for farmers from surrounding states.

The extent that this drastic increase in the minimum wage will result in job losses is unknown. However, it is difficult to comprehend how businesses won't be forced to reinvent themselves in the face of such mandated increase. Likely, the increase will force businesses to limit their hiring, cut employee hours and, where possible, automate. Proponents of the increase don’t deny that there will be losses if this increase is instituted but they claim overall it will be beneficial for the economy and particularly for those on the low-end of the pay scale.

It is conceivable that big businesses like Walmart will be able to absorb the additional costs that the minimum wage increase will create. Presumably, those cost will be passed onto the consumer. It is more difficult to comprehend how businesses that struggle in a competitive market, like small farmers, will be able to handle the increased costs. If you are a small business owner that has two or three employees and are profitable some years and not profitable in other years, how do you deal with a 67% increase in employment costs.

In my mind, a better way to help those who are at the low-end of the pay scale would be to expand the earned income tax credit (EITC). The EITC is a federal and state tax credit for low- and moderate-income working families and individuals. The EITC is refundable so that if the credit exceeds a low-wage worker’s income tax liability, both the state and federal government will refund the balance to the taxpayer. In order to receive the EITC, the taxpayer must have earnings from employment. New York’s EITC supplements the federal EITC and is equal to 30% of the federal EITC.

In contrast to a minimum wage increase, an increase in the EITC on the state level directly targets low- and moderate-waged workers. Further, it encourages people to work because in order to receive the EITC you must have a job. To help low-wage income earners lift themselves out of poverty, we should raise the state EITC to 45% of the federal EITC. This would provide additional incentive for people to find work and provide them with the earnings necessary to support themselves and their families.

Whether you believe that an increase in the minimum wage or that an increase in the EITC is a better policy, hopefully we can agree that these issues need to be debated on their own merits. We should take the minimum wage debate out of the budget particularly if it raises to such a contentious level that it results in a late budget. I’d like to hear your thoughts and concerns on this matter and any solutions you may have on improving our economy. I can be reached by mail at 200 North Second Street, Fulton, New York 13069, by e-mail at barclaw@assembly.state.ny.us or by calling (315) 598-5185.