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California, New York To Raise Minimum Wages To $15 An Hour

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California, New York To Raise Minimum Wages To $15 An Hour

Economy

California, New York To Raise Minimum Wages To $15 An Hour

California, New York To Raise Minimum Wages To $15 An Hour

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California and New York are set to become the first two states in the country to raise minimum wages to $15 an hour. The hike has already started to take place in some cities. But it's not clear how increases at the state level would impact jobs and the rest of the economy.

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It's been a big week for the campaign to raise the minimum wage. New York's Assembly has approved a significant wage bump, and California is poised to do so as well. Now, the increases would be phased in over time and reach $15 an hour in most parts of the states. There are also new lessons from Seattle, which has had a similar law on the books for more than a year. NPR's Hansi Lo Wang begins our report.

HANSI LO WANG, BYLINE: New York and California are breaking ground on a $15 minimum wage at the state level. And California Gov. Jerry Brown says he hopes they won't be the last.

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JERRY BROWN: There's no doubt in this country the gap between the better-off and those who struggle at the bottom of our economic world has grown bigger and bigger.

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ANDREW CUOMO: You can't lead a decent life. You can't raise a family on $18,000 a year in the state of New York.

WANG: This is New York Gov. Andrew Cuomo.

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CUOMO: So we want to raise the minimum wage, which, in and of itself, would affect 2.3 million workers.

WANG: New York lawmakers passed their deal today, and Brown is expected to sign California's increase into law on Monday. Still, the question now is once these states hit 15, what's next?

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CUOMO: You ask five different economists, you'll get five different answers. Why? Because they're all forecasting what they believe is going to happen in the future.

WANG: And their crystal balls are rather foggy. Cities like Seattle, San Francisco and Los Angeles have already started down the path to $15, but hitting 15 at the state level hasn't happened before. Still, economists like David Neumark at the University of California, Irvine, do have their guesses based on past research.

DAVID NEUMARK: You get some job loss, and you don't do much for poverty on net. You get - some people do better; some people do worse, but there's not a big reduction in poverty.

WANG: William Spriggs of Howard University is more optimistic. He's an economist with the AFL-CIO, an umbrella group of unions.

WILLIAM SPRIGGS: When wages go up, the workers don't quit as often, so there's less turnover. And at lower levels of turnover, it may mean that workers have to search longer to get a job.

WANG: But he argues that they'll eventually get jobs at higher wages that will help close the growing inequality gap. Putting aside this theoretical debate, though, Spriggs says $15 an hour is becoming the new norm for wages that more workers will come to expect, and that worries many small-business owners. Matt Watkins manages a citrus farm in Fowler, Calif., just south of Fresno. He told KQED that farmers may have to pass the costs of higher wages onto customers.

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MATT WATKINS: Really, all we're doing is just causing the cost of food to go up, which makes less money in your take-home check at the end of the month, just because you've got pay more for food. So, to me, it's just a revolving circle.

PAT MCCORMICK: There's going to be farms that are going to go out of business around us. And I don't know if I can afford to pay that much, especially with what we're getting for our product now.

WANG: Pat McCormick in upstate New York has similar concerns. He's a seventh-generation dairy farmer from Java Center. And he's preparing for a gradual wage increase to $12.50 an hour, before state officials reevaluate whether 15 is possible. Unlike California's statewide increase to 15 by 2022, New York lawmakers agreed to a lower starting rate for communities upstate.

AMANDA MONROE: Honestly, I don't see it affecting me in any positive way whatsoever - $12.50 an hour is just - it's going to keep me in the same exact situation that I am in right now.

WANG: Amanda Monroe is an unemployed single mother in Albany. She told WCNY that she's disappointed that upstate New York may not see as big of a wage bump as New York City workers, like Jorel Ware. He works at McDonald's in Times Square and says lots of workers are going to benefit.

JOREL WARE: This is what it's all supposed to do - impact people so we can impact the economy and boost it back up.

WANG: The news about the minimum wage increase, he says, feels like light at the end of a tunnel. Hansi Lo Wang, NPR News, New York.

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