In accordance with legislation passed in 2013, New York State’s minimum wage will increase from $8.75 to $9 an hour Dec. 31.
In addition to the general increase in minimum wage, New York state will also raise the minimum wage for tipped workers from $5 to $7.50 an hour at the end of the year.
Currently, the General Industry Minimum Wage Act mandates that all employers must pay employees at least $8.75 an hour with the exception of jobs that are subject to wage orders, which modify pay regulations.
These jobs include but are not limited to service industry and hospitality jobs in which employees receive tips as part of their compensation.
Workers in the restaurant and service industry such as waiters, bartenders and hosts will be at the forefront of those affected by the raise for tipped workers.
“The tip minimum increase — that’s the big one,” said John Parmelee, operational manager at the Naked Turtle in Plattsburgh and PSUC hotel, restaurant and tourism professor. “That affects all of the tipped hourly employees … For the Naked Turtle, that could mean a 15 percent increase in labor costs for next season compared to this season.”
In response to the increase, restaurants will have to figure out how to deal with the inevitable rise in costs, Parmelee said.
“Operators have two choices — they can absorb it or pass it on to the customers. It’s a very fragile profit margin business to begin with. I think what you’re going to see happen is operators are going to slowly pass on the increase in costs to the customers,” Parmelee said.
Over time, Parmelee said he believes restaurants will absorb less of the increased operational cost and continue to pass it on to customers.
Although changes to New York state’s minimum wage are on the horizon, a larger and more gradual increase recently enacted by Gov. Andrew Cuomo has sparked national debate.
According to Cuomo’s plan put into place using his executive authority, state workers in New York City can expect to be paid a minimum wage of $15 an hour by 2018, while state workers from outside the city would see the minimum wage rise to $15 an hour by 2021, according to the New York Times.
While some see this plan as a way to bridge the growing wealth gap and make living on a minimum wage more feasible, others argue the solution would only be temporary.
“You see what’s happened with housing costs, school costs — the $15 an hour isn’t going to be any more livable than a $9 wage is now,” said PSUC political science Olivia O’Donnell, who specializes in American politics and public policy.
Instead, O’Donnell said she believes focusing on creating jobs may be a better solution.
“I really think that raising the minimum wage is not helping the poor, and it’s not helping the middle class. We’re not going to be able to create jobs raising the minimum wage,” O’Donnell said.
The creation and support of small businesses may also be beneficial, O’Donnell said.
“I really think what we need to do is concentrate on small business,” she said. “I think that we need to subsidize small businesses and get rid of subsidizing large corporations. By subsidizing smaller businesses, we can begin to create jobs at the local level.”
For college students who are already apart of, or who will be joining the workforce in the near future, the minimum wage increase will have an impact.
According to a 2013 survey conducted by Citigroup, almost 80 percent of students are employed during the school year and work an average of 19 hours per week.
Mackenzie Renskers, a PSUC senior who worked at Party City as a cashier making minimum wage, said a $15 minimum wage would be “insane.”
Renskers said making $15 could foster an entitled atmosphere for younger people in the workforce.
“You’re supposed to work your way up the chain,” she said. “It will not have a good effect.”
Email Thomas Marble at news@cardinalpointsonline.com
