The New York State introduced a provision in the budgetary legislation (New York Labor Law) that in essence sought to increase the minimum wage just above the current federal minimum wage. The beauty of the provision is that the trajectory set seeks to increase the wages over the next three years and would stop at $9.00 per hour. Currently, the approach according to the legislation is that commencing December 31st 2013, the minimum wage shall be $8.00 per hour. After one year, as from December 31st 2014, the minimum would increase to $ 8.75 per hour and then lastly as from 31st December 2015, the minimum would be $ 9.00 per hour. This, however, does not cover the tipped workers whose minimum wage as we talk stands at $ 4.90 to $ 5.65 per hour depending on the services offered by the employees. It is anticipated that the proposed increases shall at least cover the needs of the common man even as the cost of living continues to soar. With America just coming out of the financial meltdown that saw several employees lose their jobs and unemployment rates increase substantially, the legislation on the minimum wage is a welcome move that is expected to offer some relief to the employee base. In effect, the New York State Labor Law, section 652 creates a state of certainty for the employees at least on the aspect of minimum hour rates. This is imperative especially for a country where inflation has become the order of the day.
The increase in the minimum wage rates should be analyzed from a broader spectrum. Foremost, it is essential to critically examine whether the increases in themselves are sufficient given the inflationary rates in the nation. From an economic point of view, the time value of money is critical and it is imperative that given the inflation and other economic factors, the anticipated $9.00 per hour to be paid as from December 31st 2015 in value is equal to the rates currently paid of $7.25 per hour. It is, therefore, necessary that analysts do not get duped by the increases on paper without taking due consideration of the supervening factors. It is on that premise that this paper posits that the increase is a low and should be increased further.
Indeed, this should not be done at the expense of the employers. This paper calls for an inclusive and participatory approach that equally considers the views and needs of the employees. One trend that has drawn a lot of ethical repercussions on the part of the employers is the new concept of outsourcing employees from offshore markets. In their determination to save on the operating costs, employers now outsource employees from offshore markets including China. While in the short term this approach reduces on the operating costs, in the long run, it creates several economic problems for the American markets. These problems include the economic deficits anticipated, the unfavorable balance of payments, and the fact of unemployment, among others. It is on that premise that this paper recommends for an inclusive approach in the setting of the minimum wage rates.
However, it is crucial for an overall majoritarian approach to be taken. This is an approach that satisfies the interests of the majority against that of the minority. This position is arrived at from the realization that where competing interests are at play, it is inevitable to compromise that of one party against the other. It is, however, prudent to compromise the interests of the minority.
Secondly, the minimum wage in the state should ideally be higher than the federal minimum wage. As it stands, the federal minimum wage is $7.25 per hour. Congress is in the process of increasing the minimum wage to at least $10.00 per hour, a process that has the backing of the executive through the presidency. It is, therefore, an insult for the New York State to set its minimum at a paltry $8.00 for the first year and by the third year only make it to $ 9.00 per hour. This gap is unjustified given the fact that the state of New York performs well economically and can be argued as being one of the biggest players in the American economy. On that premise, it is necessary that the state sets the pace for other states to replicate. In the interests of the American citizenry, it is only fair that the wage rate be set at a figure that is sufficient for the living costs. It is interesting that the incumbent president in the last presidential campaigns appreciated that the American citizen’s wage bill could not take care of the costs of living. While the president may have been informed by the figures across America, the same is the case for the ordinary citizen in New York State. The absurdity is that while American corporates are ready to part with millions of dollars in compensating their executives, for the normal employee, the corporates practice an absolute capitalism that merely remunerates the employees with the bare minimum. The minimum wage rates are an attestation of this regrettable practice.
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Rose, Proskuaer, Fredrick Leffler and Marc Mandelman. "New York's minimum wage to rise to $9 per hour over the next three years." Association of Corporate Counsel (2013): 5-6.