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MoneyNo 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.)

Get ready for teacher union ads blasting state tests.

– The state’s first electronic handgun permit database will cost $28 million to put in place.

10 Responses to Minimum Mess

  1. I give up.

  2. This is the first I ever heard of this. Are you sure? What are our representatives thinking? Why hasn’t this been mentioned before? More and more we are seeing policies to buy votes. This is just another example. I am saddened by these actions of our politicians and also the media for not reporting the truth.

  3. So basically the taxpayer is subsidizing the raise in minimuim wage. Great the broke state that has been shedding jobs, cutting pay and benefits because it is broke just took a bunch of private employees onto the payroll. No wonder this state is broke and a dump

  4. March 26, 2013 at 9:22 pm Eduardo Ricardo responds:

    Ex. Spend. Sive.

  5. March 26, 2013 at 11:16 pm Animule responds:

    This is a textbook case of how government – under the guise of trying to “help” – ends up screwing things up worse than before, in this case by creating a distinctly unequal playing field.

    It also shows that the lobbyists for big business interests are doing a bang-up job in Albany. They effectively protected their interests which is the way things usually work out in Albany and is why business pays so much for their services. Lobbying works. Period.

  6. March 26, 2013 at 11:19 pm lellingw responds:

    Don’t they do anything right? It seems that they make these laws in their small little group and have the floor vote on them, but never put it through a process to weed this stupid stuff out.

    • March 27, 2013 at 6:52 am Ginny Maier responds:

      This seems like the essential problem. Instead of seeing the public process (I.e hearings) as an essential step that can lead to better governance, we see again and again that elected officials in NYS see the public process as a nuisance that should be avoided if possible. The stuff that the public is “invited” to comment on is essentially toothless (for example, environmental impact statements), which serves to drain activists’ energy and have little effect on actual policy decisions. All serving to feed our cynicism and lead us not to participate, which works fine for the powers-that-be.

  7. March 27, 2013 at 7:40 am Hahvahd St responds:

    The problem with raising minimum wage is that it makes it an endpoint job if it is a “living” wage (which it’s not really). Minimum wage jobs should be a stepping stone on the way to a real job.

  8. March 27, 2013 at 9:17 am Cary Barnhart responds:

    I h ave made it known on this blog that I winter in Florida. Now I am going to make preparations to move to Florida.

  9. March 28, 2013 at 8:02 am TechnologyProfessional responds:

    If you read the article, you’ll note this only applies to workers aged 16 to 19. Upon reflection, this could be a very good idea.

    One of the best predictors of long-term employment and wages is working early in life, as soon as you get out of school (or even while you are in school). Getting teenagers into the workforce by subsidies, if necessary, may change their future trajectory for a whole generation.

    Not a guaranteed success, but not an obviously bad idea either.

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