No matter where you fall in the minimum wage debate, I don’t think this is what any of us wanted. When state leaders agreed to hike the minimum wage over three years from $7.25 to $9, they didn’t mention a key detail. Taxpayers would help foot the bill.
Employers would get tax credits for hiring seasonal workers aged 16-19. The Associated Press reports companies would get compensated 75 cents an hour per worker when the minimum wage hits $8, $1.31 when it reaches $8.75, and $1.35 when it reaches $9.
Even WalMart and McDonald’s, which rake in billions of dollars, would get this tax credit, which is estimated to cost New Yorkers $20 million to $40 million next fiscal year.
The Fiscal Policy Institute points out this law could prompt employers to replace older workers with teenagers, because they get a cash benefit. It could also have the effect of causing companies to keep as many workers as possible at the minimum wage, because of the financial incentive. FPI writes:
This takes income polarization and policies that deprive workers of fair pay and a decent living to new heights–we’re about to become the first state to make a minimum wage a maximum wage at the same time! Michigan and Wisconsin move over—New York wants to officially discourage pay increases. Think about it—starting in 2016, New York will reward employers up to $2,808 per teenage worker for keeping wages flat for three years ($2,808 is the $1.35 hourly tax credit times 40 hours a week times 52 weeks).
This is what happens when budgets are negotiated behind closed doors and the fine print becomes available only hours before votes.
More Links of the Day:
– New York State lawmakers propose an official state dirt. (Yes this is a real story.)
– The state’s first electronic handgun permit database will cost $28 million to put in place.