Klein to cost workers a billion dollars plus
a three year phase in of the minimum wage hike to $9 an hour would cost workers more than a billion dollars. All because of Sen. Klein backing the Republicans rather than the Senate Democrats.
the Republican-IDC coalition in the Senate is holding out for a three year phase-in increase in the state minimum wage, with no indexing. So rather than $9 an hour immediately, something such as $8.50 in the first year, $8.75 in the second year, and $9.00 an hour in the final year.
This deal will cost low-income workers probably around a billion dollars. Hopefully firm numbers will be available early this afternoon from the Fiscal Policy Institute (FPI) and National Employment Law Project (NELP).
But a recent report by FPI and NELP does provide guidance. http://fiscalpolicy.org/9-with-indexing-adds-hundreds-of-millions-of-dollars-more-in-consumer-spending-and-more-jobs
The report estimated that raising the minimum wage to $9.00 an hour from $7.25 an hour would generate an additional $1.85 billion in low-income workers paycheck.
They did estimate that raising the minimum wage to $8.75 rather than $9.00 an hour would cost full-time workers $520 per year, impacting upon 1.7 million workers. Such workers would get $936 more in 2015, $1,352 more in 2016, and approximately an additional $400 each successive year under a $9.00 minimum wage plus indexing, as compared with the alternative Albany proposal of $8.75 without indexing.
Not all minimum wage workers are full time of course. 87% of minimum wage workers work more than 20 hours per week. 48% work more than 35 hours per week.
But some quick math indicates that raising the minimum wage to $8.50 rather than $9.00 (a $1.25 increase rather than $1.75 - or .50/1.75 times $1.85 billion) would provide $548 million less income to workers in the first year. This number however is not exactly correct (probably too low) because fewer workers would see any increase at all (i.e., those between $8.50 an hour versus $9.00 an hour). That is why we need Fiscal Policy Institute to do a run with the actual number of minimum wage workers at each level.
But over the three years of the phase in, it is likely that low income workers would lose well in excess of a billion dollars from Sen. Klein's decision to back the Senate Republicans.