Two Sides of Same Coin: Minimum Wage


For single mother Yaumara Rodriguez, a minimum-wage hike means the difference between paying for gas or giving her daughters some new clothes.

“Gas is very expensive,” Rodriguez said. “It’s almost what I make in an hour.”

For business owner Jerry Dellas, a minimum-wage hike means the difference between keeping his restaurants afloat or shutting them down.

“It’s just another nail in the coffin,” Dellas said.

Rodriguez and Dellas represent opposite sides of the proposed minimum-wage increase in New York state. In January, Assembly Speaker Sheldon Silver called for boosting  minimum wage from $7.25 to $8.50.

Business leaders oppose the hike and argue it will force employers to cut jobs. Proponents of the hike insist it’s impossible to live off $7.25 an hour and argue the increase will strengthen the economy as workers spend the new income.

Here’s the case each side presents, as seen through the lives of two Central New Yorkers:

Yaumara Rodriguez lives off welfare, food stamps and minimum-wage earnings from the hotel she works at in Liverpool. Rodriguez has two daughters, ages 3 and 8. She emigrated from Cuba to Syracuse three years ago. Rodriguez speaks little English. She tells her story through an interpreter.

Rodriguez would like to take her daughters to Chuck E. Cheese’s after she gets off work. But she can’t afford it, she said. Her girls wear old pants and shoes. Rodriguez can’t pay for new ones.

A minimum-wage hike would mean she could buy two gallons of milk instead of one. “It would mean a lot, because everything goes up but the salaries,” said Rodriguez, 30. “And it might not leave a lot of money, but it will give me a breather.”

Rodriguez is among the 91,000 workers in the state last year who made minimum wage, according to the U.S. Bureau of Labor Statistics. Of those workers, 57,000 — or 62 percent — were women.

Supporters of the minimum-wage hike call it a stepping stone out of poverty for low-wage workers.

“No one who works full-time should be in poverty,” said Andres Kwon, director of the campaign to raise the minimum wage in the Working Families Party. The party fights for higher wages and workers’ rights.

But the effect of minimum-wage hikes on poverty is unclear. For example, a 2010 study in The Southern Economic Journal, which has published economic studies since 1933, found poverty rates did not fall in states where minimum wages increased.

Often, minimum-wage workers like Rodriguez still struggle to get by. An increase, she said, would help many families.

“There’s a lot of jobs like housekeeping that pay minimum wage, and the people who work there are people like me,” she said. “Single mothers or just older people. Sometimes this is the only job they can get.”

The business owner’s perspective:

Jerry Dellas’ fast-food joints are in trouble. One is losing money, he said. The other is barely breaking even. He had to close down the third one.

Dellas is one of the co-owners of Hoffman Hot Haus. The two remaining restaurants employ 30 people, mostly teenagers who start at minimum wage.

A minimum-wage increase, Dellas said, will force him to make difficult decisions: Jack up menu prices, hire fewer people or cut back on employees’ hours. In the worst-case scenario, he’ll have to close.

A higher minimum wage, he said, is “just another thing that gets in the way of us trying to make a successful business.”

Many business owners around the state have similar concerns. They argue the majority of minimum-wage earners are just teenagers looking to buy things like movie tickets.

“They’re working to have some money in their pockets. They’re not working to put food on the table for their families,” said Mike Durant, the New York state director of the National Federation of Independent Business.

Yet the vast majority of minimum-wage workers are not teenagers. Of the nearly 1.7 million workers nationwide who earned minimum wage last year, nearly 1.2 million — or 70 percent — were aged 20 or older, according to the U.S. Bureau of Labor Statistics.

Age withstanding, business owners have another concern: A minimum-wage hike will kill jobs.

But the effect of minimum-wage hikes on the economy is also unclear. For example, a 2010 study in The Review of Economics and Statistics, which is edited at Harvard University, focused on 17 states with minimum-wage levels higher than the federal minimum wage. Those states had nearly the same economic growth as the states with the federal minimum wage.

Still, business in the short term will be more expensive after a hike, economic experts predict.

Most employers will have to find ways to cut costs or make fewer people do more work, said Donald Dutkowsky, an economics professor at Syracuse University. That could create problems as the higher minimum wage attracts more people into the workforce, he said.

“You’ve got to get them out with incentive to look for jobs,” Dutkowsky said, “but not killing businesses in the process.”

(Michael Boren is a senior in newspaper and online journalism.)


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