New York’s economy may be on firmer ground than, say, Michigan’s, but that’s not saying much. Statewide, the unemployment rate of 8.5 percent is nearly a half-point higher than the national jobless rate. In New York City, the unemployment rate is about 9.5 percent.
So now is not the time for politicians to pass an election-year increase in the state’s minimum wage, currently set at $7.25 an hour. Hikes in the minimum wage invariably lead to fewer new entry-level jobs, and that’s something the city and state can ill afford.
Gov. Andrew Cuomo said the other day that while he supports a minimum-wage increase, such a measure would never get through the Republican-controlled state Senate. So, in essence, the governor seems prepared to throw in the towel on this issue, even though he is under tremendous pressure from his fellow Democrats and various advocacy groups to force the issue.
Mr. Cuomo is right about the politics: Republicans in the Senate surely would kill a proposed increase to $8.50 an hour. But he should also make it clear that the issue of timing involves more than politics. It’s simply common sense.
Economic policy in 2012 should have one and only one outcome in mind: job creation. Raising the minimum wage would have precisely the opposite effect, as study after study has shown. In better times, like the mid-1990s, increases in the minimum wage have been implemented without destroying entry-level jobs. But those increases were approved when the creative engines of capitalism were running on full throttle.
Today, the engines continue to sputter. An increase in the minimum wage very likely would lead to a stall, which would help nobody.
The Cuomo administration has put into place several policies aimed at encouraging job growth. A new tax credit is available to companies that hire young males who have suffered through long-term unemployment. A new low-income housing program has the doubly beneficial effect of creating construction jobs while offering the poor better housing choices.
Those are precisely the kinds of economic development programs that lead to long-term benefits for the poor.
But in an election year, Democrats in the Legislature would prefer to appease politically powerful special interests with support for a minimum-wage hike. It is to Mr. Cuomo’s credit that he seems determined to resist the temptation, regardless of his reasons.