By Staff Reporter
BUFFALO — Western New York’s minimum-wage workers will not get a raise on Jan. 1. The state’s first scheduled cost-of-living increase under the 2023 wage law has been canceled by a jobs test written into that law. The governor’s own office now says the test is “overly sensitive.”
The minimum wage outside New York City, Long Island and Westchester County will stay at $16 an hour through 2027 unless the Legislature changes the law, the state Department of Labor says. Gov. Kathy Hochul has proposed a fix that would raise the upstate rate to $16.55 on March 1. Lawmakers aren’t scheduled to return to Albany until January.
What tripped the freeze
The 2023 law, part of the state budget deal Ms. Hochul negotiated that year, raised the minimum wage in steps to $16 upstate and $17 downstate by 2026. Starting in 2027, it ties future increases to inflation. It also includes three “off-ramps” that pause an increase: negative inflation, a half-point rise in the unemployment rate, or a drop in total employment.
The third one tripped. Seasonally adjusted nonfarm employment in New York was above 10 million in January. It fell below that in April and reached 9.96 million in July, according to Times Union figures summarized by FingerLakes1. Under the law, that’s enough. The decline doesn’t have to reach any particular size.
The governor’s program bill memo says that design is the problem. One off-ramp, the memo says, “pertaining to the absolute number of jobs in the state–has turned out to be overly sensitive, and does not reflect changes to New York’s overall labor market.”
The memo blames the decline in part on “the extreme shifts in immigration enforcement, restrictive visa policies, and federal tariffs.” It says private education, hospitality and retail jobs declined “by a monthly 0.07% from January to July.”
Western New York’s numbers
The regional picture is just as flat. Private-sector jobs in the Western New York region fell by 600, or 0.1 percent, to 538,700 in the 12 months ending in September, the Labor Department reported. Health care, education and professional services added jobs. Finance, trade and transportation, manufacturing and construction lost them.
For a full-time worker paid the upstate minimum, the 55-cent increase Ms. Hochul is proposing comes to about $1,144 a year before taxes, based on a 2,080-hour work year. The freeze also holds New York’s overtime-exemption salary threshold at $1,199.10 a week upstate, according to the law firm Mintz, as reported by Hoodline. That threshold rises when the minimum wage does.
Home care aides are treated differently. Their minimum wage is governed by a separate law that the off-ramps don’t cover. It will rise to $19 an hour upstate on Jan. 1, the state says. That wage is capped at $3 above the regular minimum.
Hochul’s fix
Under Program Bill #44, the employment test would trigger a freeze only if the median of the 12-, six- and three-month rates of change, converted to monthly rates, falls below negative 0.25 percent. The labor commissioner would then set new rates effective March 1, 2027. The bill would also fix two drafting errors in the home care wage law. Under “Budget Implications,” the memo says only: “To be determined.”
The governor’s minimum wage page tells employers that Ms. Hochul “has proposed a change to the law that could allow minimum wage rates to rise with inflation starting March 1, 2027, if the Legislature approves it,” and adds: “Employers should be aware of this potential change and plan ahead.”
Labor says go further. Small business says no.
Raise Up NY, a coalition of unions and worker groups, welcomed the governor’s admission but said the change is too narrow. “New Yorkers need a raise. But this year, with the cost of living spiking again, and prices rising faster than paychecks, they won’t get one unless the legislature takes quick action,” said Theodore A. Moore, a coalition leader, in a statement.
“We are pleased to see Governor Hochul acknowledge that the off-ramps are problematic,” Mr. Moore said. “By removing all off-ramps that freeze raises and establishing wage parity upstate, we can provide immediate relief for every working New Yorker.”
Wage parity is a Western New York issue. Under current law, the minimum wage in Buffalo is $1 an hour lower than in Yonkers.
The National Federation of Independent Business, the small-business lobby, told its members it expects the proposal and is against it. “NFIB will continue to monitor the situation and will oppose any increase to the minimum wage,” the group wrote.
Critics of the wage law say the freeze is a warning sign. Martin Cantor, director of the Long Island Center for Socio-Economic Policy, wrote in Long Island Business News that “tying the increase in minimum wage to inflation, without a corresponding increase in productivity, is in of itself inflationary.” He called the freeze a sign of “New York’s labor market and out-migration problem.”
The questions for Albany
The governor’s proposal admits that the safeguard she agreed to in 2023 was poorly designed, and that admission comes a month before an election in which she is on the ballot. It doesn’t commit the Legislature to act, and the memo puts no price on the change for the state budget.
Under the current law, the minimum wage can be frozen for at most two years in a row, according to Cornell University’s Agricultural Workforce Development program. Without a change, the next chance at an indexed raise is Jan. 1, 2028. The Labor Department must announce that rate by Oct. 1, 2027.
The Chronicle is asking the governor’s office whether the bill will move on its own or as part of the budget, and what it would cost the state.
Featured photo: Small businesses along Elmwood Avenue in Buffalo. Photo by Reading Tom via Wikimedia Commons, CC BY 2.0.
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