EPI BRIEFING PAPER ECONOMIC POLICY INSTITUTE JANUARY 5, 2016 EPI BRIEFING PAPER #416

Transcription

1 EPI BRIEFING PAPER ECONOMIC POLICY INSTITUTE JANUARY 5, 2016 EPI BRIEFING PAPER #416 Raising the New York state minimum wage to $15 by July 2021 would lift wages for 3.2 million workers BY DAVID COOPER ECONOMIC POLICY INSTITUTE 1333 H STREET, NW SUITE 300, EAST TOWER WASHINGTON, DC

2 Table of contents Introduction and key findings...3 Background...4 Demographic characteristics of workers...6 Age...8 Gender...8 Race/ethnicity...8 Education...11 Hours of work...13 Household and family income...14 Family status and children...16 The importance of workers pay to their total family incomes economic sectors account for nearly three-fourths of workers...17 Conclusion...19 About the author...19 Appendix A: Additional tables and figures...19 Appendix B: Technical documentation and methodology...35 Endnotes...37 References...38 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 2

3 Introduction and key findings Since the beginning of the 20th century, U.S. states have used minimum-wage laws to help ensure that regular employment provides the means to a decent quality of life. For decades following its enactment in 1938, the federal minimum wage provided this protection for workers across the United States. Yet in recent decades, the buying power of the federal minimum wage has eroded because policymakers have failed to raise it such that its value keeps pace with rising prices. As a result, a parent who works full time and is paid the federal minimum wage does not currently earn enough through work to be above the poverty line (Cooper 2015a). Faced with this inadequate federal standard, lawmakers in many states have adopted higher minimum wages to better reflect state-specific costs of living, and to help alleviate the wage inequality that has grown considerably over the past generation, in part as a result of eroding minimum wages (Mishel 2014). In July 2015, an executive-appointed New York wage board created to make recommendations related to fast food workers pay recommended that the minimum wage for these workers be gradually raised to $15 per hour by 2018 in New York City and by 2021 throughout the rest of the state. In September, the acting state labor commissioner signed an order adopting the wage board s recommendations for fast food workers. Shortly thereafter, the state s governor, Andrew Cuomo, called for a legislative increase in the state minimum wage that would raise the wages of all workers in the state to at least $15 per hour. As a first step toward this goal, Gov. Cuomo announced in November his intent to raise the minimum pay of state employees to $15 an hour on a schedule similar to that of the fast food wage order. This report analyzes the likely effects of a statewide increase in the minimum wage in terms of the workers who would be and the resulting change in their pay if the increase were implemented along a schedule similar to that of the fast food wage order. In particular, the report analyzes the by age, gender, race and ethnicity, education levels, work hours, family status, household composition, and family income. Key findings include: Raising the minimum wage to $15 per hour by 2018 in New York City and by mid-2021 throughout the rest of New York state would directly or indirectly lift wages for 3.2 million workers about 37 percent of all workers in the state. In New York City, the increase would raise the wages of 1.4 million workers, approximately 35 percent of the city s. Outside of New York City, the increase would lift pay for 1.7 million workers, roughly 38 percent of wage earners elsewhere in the state. Over the phase-in period of the increases, workers would receive $15.3 billion in additional wages. Once the increase to $15 is reached, the average worker would earn roughly $4,800 more in annual pay than she does today (assuming no change in the number of work hours). The workers who would benefit from the higher minimum wage do not fit the stereotype of low-wage workers being teenagers from affluent families working part time. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 3

4 A mere 5.2 percent of workers are teenagers. Nearly 95 percent are 20 years old or older, and more than three-quarters are 25 or older. The majority of workers (52.7 percent) are women. Statewide, roughly half of workers are persons of color. However, within New York City, more than three-quarters of workers are persons of color, and statewide, workers of color would benefit disproportionately from the increase. More than half of all Hispanic or Latino workers in the state would receive a raise, as would 40.5 percent of all black or African American workers. Of workers who would receive a raise, two-thirds work full time, more than half (52.3 percent) have some college experience, and nearly a third (33.0 percent) have children. Low-income households would benefit disproportionately from the increase. More than a third (37.1 percent) of workers come from families either in poverty or near poverty, defined as having income less than 200 percent of the poverty line. Over three-fourths of workers in or near poverty would get a raise. The workers who would benefit earn, on average, half of their family s total income. More than a quarter (27.0 percent) of workers are the sole providers of their family s income. Three major industries have more than 400,000 workers each: retail trade, restaurants, and the group of human service workers and care providers in the home-based and residential care, social assistance, and child care sectors. Background On September 10, 2015, Gov. Andrew Cuomo proposed increasing the New York state minimum wage in several stages to $15 an hour, which would make New York the first state with a statewide $15 minimum wage. This followed a decision by a Cuomo-appointed wage board to recommend a $15 minimum wage for employees of fast food chains. The wage board s action was informed by testimony at hearings around the state in which scores of workers, advocates, and experts described the inadequacy of pay in the fast food industry and the damaging effects such low pay has on workers, families, and their communities. Workers described having to work multiple jobs to make ends meet, sacrificing time with family, and struggling to afford rent, food, health care, and other necessities (Karlin 2015). Low pay among fast food workers also forces many of these workers to rely on public assistance programs to supplement their inadequate earnings, with 60 percent of workers in the industry using some form of means-tested government assistance (Allegretto et al. 2013). The Economic Policy Institute s Family Budget Calculator (Gould, Cooke, and Kimball 2015) shows that in the least expensive area of New York the Buffalo/Niagara Falls metro area a single, childless adult working full time, year round, requires an hourly wage of at least $13.48 to achieve a modest but adequate standard of living. Using inflation projections from the New York State Budget Office, by 2021 workers in this region, and in all other areas of the state, will require an hourly wage of $15 or more to be able to afford a modest yet adequate living standard. 1 In New York s metropolitan areas, a single adult will need an hourly wage of $15.72 or more by 2021 to meet her basic needs. Parents who are raising children will need an hourly wage much greater than $15 in 2021, even if both parents are working EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 4

5 to support one child. 2 The significant gap between current minimum-wage levels and the wages required to achieve a modest yet adequate living standard reflects the extent to which lawmakers have let the minimum wage erode. Under legislation enacted in 2013, New York s minimum wage was raised above the current $7.25 federal minimum wage and reached $9.00 on December 31, At $9.00 an hour, the state minimum wage is still 20.3 percent below its inflation-adjusted value in 1970, when its value (in 2014 dollars) was $11.29 per hour (using national measures of inflation). 3 However, adjusting for changes in nationwide prices (inflation) does not reflect the higher cost of living in New York compared with the national average. To match the 1970 value of the minimum wage accounting both for national price changes and the higher cost of living in New York would require a New York minimum wage of $14.27 in Adjusting that level for projected inflation in New York, as forecast by the State Division of the Budget, would bring the state minimum wage to $15.01 per hour in 2018, effectively the same minimum-wage level and implementation year set by the wage board for fast food workers in New York City. Another critical benchmark for considering the appropriateness of a $15 minimum wage, and the state economy s capacity to support it, is the growth in average worker productivity since Over the past 40 years, average labor productivity the value of goods and services produced from each hour of work has grown steadily across the United States, yet real (inflation-adjusted) hourly pay for the vast majority has barely budged (Bivens et al. 2014). This is due, in part, to the falling real value of state and federal minimum wages (Mishel 2014). In New York, had the 1970 state minimum wage of $11.29 in 2014 dollars been raised at the same growth rate as average U.S. labor productivity, it would be $21.40 today. This is not to say that the state minimum wage should be this high, but it does indicate that had lawmakers taken a different path over the past four decades, it could have been this high given growth in workers average output per hour. Critics of raising the minimum wage sometimes argue that measuring changes in the minimum wage against changes in average labor productivity is inappropriate because productivity among low-wage workers has not grown as much as average labor productivity. This criticism misses the point. Rising average labor productivity provides the means for improving living standards for all workers. To observe that improvements in productivity would allow for a minimum wage of over $21 today is to say that had the benefits of productivity improvements been shared more equally, rather than being concentrated among the highest-paid earners and wealthiest households, the lowest-paid workers in our economy could be making over $21 an hour. 5 It is a result of policy decisions that they are paid far less. Finally, in assessing the suitability of a proposed minimum wage, analysts will also often compare the proposed minimum to the median hourly wage of full-time workers, a ratio known as the Kaitz index. (See Cooper, Schmitt, and Mishel 2015 for more information on the Kaitz index and historical Kaitz values of the U.S. minimum wage.) Based upon the American Community Survey (ACS) data used in this study, a minimum wage of $15 in 2021 would equal 58 percent of the projected median wage of full-time workers in New York state, under the conservative assumption that wages at the median grow no faster than projected inflation. 6 This would be slightly above the high point of the federal minimum wage in 1968, when it equaled roughly 55 percent of the national median wage of full-time workers (although this difference may not be meaningful, since these estimates are produced using different data sets). Moreover, individual states have had minimum-to-median wage ratios as high as 67 percent, using the earliest available state-level EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 5

6 TABLE 1 Date Schedule of minimum-wage increases in New York Fast Food Wage Board order New York City Minimum wage in: Proposed state minimum-wage increase* Areas outside New York City Date New York City Minimum wage in: Areas outside New York City 12/31/2015 $10.50 $ /01/2016 $10.50 $ /31/2016 $12.00 $ /31/2016 $12.00 $ /31/2017 $13.50 $ /31/2017 $13.50 $ /31/2018 $15.00 $ /31/2018 $15.00 $ /31/2019 $ /31/2019 $15.41** $ /31/2020 $ /31/2020 $15.82** $ /01/2021 $ /01/2021 $16.25** $15.00 * While Gov. Cuomo has not yet released a specific timetable for the proposed statewide increase to $15, this analysis assumes this increase would follow roughly the same schedule as the increase mandated for the state s fast food workers. ** This analysis assumes the New York City minimum wage would be indexed to inflation after reaching $15. Source: Order of New York Labor Commissioner on the Report and Recommendations of the 2015 Fast Food Wage Board, September 2015 data (Zipperer and Evans 2014). Additionally, a half dozen developed countries have national minimum wages equal to at least 57 percent of their median wage (Cooper 2015b). While Gov. Cuomo has not yet released a specific timetable for the proposed phased-in statewide minimum-wage increase to $15, the schedule will likely resemble the fast food minimum-wage increase shown in the left side of Table 1. This report analyzes how raising the state minimum wage applicable to all industries to $15 over roughly the same period as the fast food wage order would affect New York workers and their pay. The right side of Table 1 shows the schedule of minimum-wage increases modeled in this report. Note that in the years after the New York City minimum wage has reached $15 per hour, this analysis assumes that the minimum wage would be indexed to inflation such that the state labor department would automatically make adjustments each year to preserve the inflation-adjusted value of the wage floor. This type of automatic indexing is the best way to ensure that the real value of a minimum-wage income does not erode over time. It removes the need for policymakers to repeatedly legislate further increases, and it allows businesses to plan for a small and predictable increase in the wage floor each year. Currently, 15 states and the District of Columbia use automatic inflation indexing. 7 Demographic characteristics of workers Raising New York s minimum wage in stages to $15 by mid-2021 would lift pay directly or indirectly for nearly 3.2 million New York workers, comprising 36.6 percent of workers employed in wage and salaried positions throughout the state. 8 Figure A shows the number of workers who would receive a raise as the minimum wage is gradually increased, combining the workers in both New York City and elsewhere in the state. In the first step, simulated to occur on April 1, 2016, the minimum is raised from $9.00 to $10.50 in New York City and to $9.75 in the rest of the state, rais- EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 6

7 FIGURE A Number of workers (in millions) who would benefit from increasing the New York state minimum wage to $15 by July 1, 2021 : 2.06 Indirectly Directly : : : : 3.01 : : 3.16 (36.6% of all workers) Source: EPI analysis of American Community Survey microdata, 2014 ing pay for 2.06 million workers in the state. This includes 1.6 million workers who would directly benefit meaning their current pay rate as of January 1, 2016, would be between $9.00 and $9.74 outside of New York City and between $9.00 and $10.49 in New York City. An additional 460,000 workers would indirectly benefit, meaning they would likely receive a raise through spillover or ripple effects because their current pay is just above the new minimum wage levels reached on April 1. Raising the minimum wage typically results in wage increases for workers further up the wage ladder because employers want to maintain some progression in their internal pay scales (Wicks-Lim 2006). With each successive increase, the cumulative number of workers who would benefit grows. By the second step (simulated to occur on December 31, 2016), when the minimum wage reaches $10.75 outside of New York City and $12.00 in New York City, 1.9 million workers would directly receive a raise, and 511,000 would indirectly receive a raise. Thus, the total number of workers would rise to 2.4 million in the second step, to 2.7 million in the third step a year later, and so on in the subsequent steps, reaching just under 3.2 million in the final step on July 1, EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 7

8 Of the 3.2 million New York workers who would benefit from the minimum-wage increase, 1.4 million work in New York City (45.6 percent of the total population), and 1.7 million work in the downstate suburbs and upstate (54.4 percent of workers throughout the state). Among all New York City workers, 34.8 percent would benefit from the increase. Among workers elsewhere in the state, 38.3 percent would receive a raise. See Appendix Table A1 for details on the number of workers directly and indirectly at each step of the minimum-wage phase-in for both city and non-city workers. Age The low-wage workers likely to benefit from increasing the minimum wage are often stereotyped as teenagers earning discretionary spending money. Although this would not justify paying them wages significantly lower than those paid to their counterparts a generation ago, this stereotype is false. In fact, as the tendency for young adults to attend college has grown over the years, teenagers account for a relatively small portion of the New York and represent only 5.2 percent of those who would be by increasing the minimum wage to $15. Nearly 95 percent of workers are at least 20 years old. Figure B indicates that over three-fifths of those are between the ages of 25 and 54. Among workers, far more are age 40 or older (40.9 percent) than are under age 25 (23.8 percent). Gender Women account for 52.7 percent of workers who would be by the minimum-wage increase, slightly higher than their share of the New York. As shown in Figure C, 39.0 percent of New York s working women would get a pay increase if the state minimum wage were raised to $15 by mid-2021, as would about one-third (34.3 percent) of the state s working men. About 37 percent of working mothers and 24.3 percent of working fathers would benefit. The rates are even higher for single parents: Over 45 percent of single working mothers would get a raise from a $15 state minimum wage, as would 39.3 percent of single working fathers. Race/ethnicity When the state is considered as a whole, about half (49.1 percent) of those who would benefit from a minimum-wage increase to $15 are white, non-hispanic workers, as shown in Figure D. Latino workers of any race make up the next largest share, at just under a quarter (24.6 percent) of the total population. Black or African American workers are 15.2 percent of the total, Asians comprise 8.9 percent, and workers of other races or ethnicities make up the remaining 2.2 percent. Despite being a smaller share of the total population statewide, workers of color would benefit from a minimum-wage increase at significantly higher rates than would white, non-hispanic workers. The bar chart in Figure D shows the share of each race or ethnic group that would receive a raise if the minimum wage were increased to $15 by mid As the figure shows, 40.5 percent of all black or African American workers would receive higher pay, as would more than half of all Latino workers. More than a third (37.5 percent) of Asian workers would receive a raise while 30.9 percent of white, non-hispanic workers would receive higher pay. Because the racial and ethnic composition of New York City is different than that of the rest of the state, there are meaningful differences in the composition of the workers likely to be by the proposed minimum-wage increase EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 8

9 FIGURE B Age of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 workers who are teenagers versus age 20 or older Teenagers: 5.2% Age 20 or older: 94.8% Detailed age breakdown of workers Age 55+: 15.7% Less than age 25: 23.8% Age 40 to 54: 25.2% Age 25 to 39: 35.3% Source: EPI analysis of American Community Survey microdata, 2014 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 9

10 FIGURE C Sex of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 Men: 47.3% Women: 52.7% Shares of demographic groups that would benefit, by gender Workers Working parents 24.3% 39.0% 34.3% 36.7% Women Men Working single parents 39.3% 45.4% Workers of color 44.2% 44.8% % Source: EPI analysis of American Community Survey microdata, 2014 to $15. Among the in New York City, Hispanic workers comprise the largest share of the population, at 36.7 percent of workers likely to get a raise. White, non-hispanic workers make up just less than one quarter (24.0 percent) of the. Black or African American workers account for 21.5 percent, and Asians are 15.3 percent of those. Demographic breakdowns for the populations in the state as a whole, in New York City, and outside New York City can be found in Appendix Tables A2, A3, and A4, respectively. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 10

11 FIGURE D Race/ethnicity of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 Other race/ethnicity: 2.2% Asian: 8.9% Hispanic of any race: 24.6% White, non-hispanic: 49.1% Black or African American: 15.2% each worker race/ethnic group that would benefit White, non-hispanic Black or African American Hispanic of any race Asian Other race/ethnicity 30.9% 40.5% 37.5% 39.8% 51.8% % Source: EPI analysis of American Community Survey microdata, 2014 Education Many of the workers who would benefit from increasing the New York minimum wage to $15 by 2021 have more education than is commonly acknowledged. As shown in Figure E, more than half of workers have at least some college experience, with nearly 10 percent having an associate degree and almost 20 percent holding a bachelor s degree or higher. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 11

12 FIGURE E Educational attainment of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 Bachelor s degree or higher: 19.8% Less than high school: 16.0% Associate degree: 9.4% High school: 31.8% Some college, no degree: 23.0% each worker educational attainment group that would benefit Less than high school High school Some college, no degree Associate degree Bachelor s degree or higher 18.1% 35.4% 50.8% 45.3% 67.0% % Source: EPI analysis of American Community Survey microdata, 2014 The bar graph in Figure E shows the share of workers at each education level who would receive a raise from increasing the state s minimum wage to $15 by Not surprisingly, workers with lower levels of education are far more likely to be. Two-thirds (67.0 percent) of workers with less than a high school education would receive a pay increase, as would half (50.8 percent) of all workers with only a high school diploma. Just over one-third (35.4 percent) of those with an associate degree stand to benefit from the higher minimum wage, as do about one in six New York workers with a bachelor s degree or higher. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 12

13 FIGURE F Work hours of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 Part time (<20 hours): 8.4% Mid time (20-34 hours): 24.7% Full time (35+ hours): 66.9% each work hour group that would benefit Part time (<20 hours) Mid time (20-34 hours) Full time (35+ hours) 30.5% 53.9% 64.4% % Source: EPI analysis of American Community Survey microdata, 2014 Hours of work Many New York workers who would benefit from a state minimum-wage increase to $15 also work longer hours than is commonly acknowledged; they are not predominantly working part time or in after-school jobs. As shown in the pie chart in Figure F, two-thirds of workers work full time, defined as working at least 35 hours per week. Another 24.7 percent work between 20 and 34 hours per week, and only 8.4 percent work less than 20 hours per week. It is important to note that many individuals who work less than full time are not opting for fewer hours by choice. Some are limited by a lack of available work, while circumstances prevent others from seeking full-time employment, such as the need to care for a family member, or a lack of adequate work supports that might facilitate a full-time sched- EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 13

14 FIGURE G Household income of workers who would benefit from increasing the New York state minimum wage to $15 per hour by July % less than 42.6% $75,000 per year: 62.5% % % 13.5% 11.1% 0 Less than $50,000 $50,000 - $74,999 $75,000 - $99,999 $100,000 - $149,999 $150,000 or more Note: Percentages do not sum to 100% due to rounding. Source: EPI analysis using American Community Survey microdata, 2014 ule (e.g., access to child care, paid leave, or a flexible work schedule). For these workers, an increase in their hourly rate of pay is arguably even more important, as it could provide resources that could enable them to work more hours. The bar chart in Figure F shows that 30.5 percent of full-time workers in the state are likely to benefit from raising the minimum wage to $15, compared with nearly two-thirds of those working hours per week and more than half of those who work less than 20 hours per week. Household and family income The great majority of New York workers who would benefit from increasing the minimum wage come from families of modest means. As shown in Figure G, about 43 percent of workers have total household incomes of less than $50,000, and nearly 63 percent have household incomes of less than $75,000. While these levels of household income may seem high relative to a minimum-wage income, overall household incomes of New York workers, including those who commute from other states, tend to be higher than elsewhere in the country. Less than a quarter (24.3 percent) of all New York workers (including those who commute) have total household incomes below $50,000, and only 42 percent have household incomes less than $75,000. This means that workers from the least-well-off households would disproportionately benefit from the wage hike. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 14

15 FIGURE H family income group (relative to poverty line) that would benefit from increasing the New York state minimum wage to $15 by 2021 At or below the poverty line 75.4% % poverty 78.2% % poverty 58.7% 301% poverty or more 21.4% Source: EPI analysis of American Community Survey microdata, 2014 Often, minimum-wage opponents say that the minimum wage is poorly targeted because some of the workers who would benefit from a minimum-wage hike come from middle-income families. Considering how much of the net job change since the onset of the Great Recession has occurred in low-wage sectors, it is perhaps not surprising that many middle-income families have a low-wage earner. 9 Yet the fact that the minimum wage provides protection to workers at all levels of family income is not a failing of the law; rather, it reflects the minimum wage s role as a labor standard. The minimum wage prevents exploitation of workers, regardless of their socioeconomic background. No worker, regardless of his family income level, should have to work for unacceptably low wages. Moreover, the fact that both low- and middle-income families alike stand to benefit from an increase in the state s minimum wage underscores that the failure to adequately raise the minimum wage over the past 45 years has hurt both low- and middle-income families. Nevertheless, when looking at family income of the (listed in Appendix Table A2), it becomes clear that many of the workers who would benefit from a higher state minimum wage are desperately in need of higher incomes. 10 Just less than a quarter of workers are either in poverty or have family incomes within 150 percent of the poverty line. In fact, 37.1 percent of workers are either in poverty or what experts often describe as near poverty, having total family income less than 200 percent of the poverty line. Roughly 18 percent of all New York workers have family incomes that fall into this near poverty range, indicating again that the workers with the greatest family need would disproportionately benefit from a higher state minimum wage. Figure H shows the share of workers grouped by ratio of their family income to the poverty line who would benefit from the higher minimum wage. Three quarters of workers in poverty would get a raise, as would 78.2 percent of workers with family incomes between 101 percent and 200 percent of the poverty line. In contrast, just over 20 percent of workers with family incomes at or above 300 percent of the poverty line would be by the policy change. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 15

16 FIGURE I Family status of workers who would benefit from increasing the New York state minimum wage to $15 by July 2021 Married parent: 22.0% Unmarried, no kids: 53.3% Single parent: 11.0% Married, no kids: 13.8% Married parent Single parent Married, no kids Unmarried, no kids each worker family type that would benefit 26.8% 27.8% 44.1% 45.7% % Source: EPI analysis of American Community Survey microdata, 2014 Family status and children Many of the New York workers who would benefit from increasing the state minimum wage to $15 are supporting families and children. As shown in the pie chart in Figure I, more than one-third (35.8 percent) of the workers are married, and just less than one-third (33.0 percent) of workers have children. The bar chart portion of Figure I shows the share of each group of workers by their family status who would benefit from increasing the state minimum wage to $15 by More than a quarter of all working married parents in New York would get a pay raise. For single parents facing the challenge of raising one or more children on their own and EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 16

17 having to juggle the demands of child care and work, low pay only compounds their difficulties. In New York, over 340,000 working single parents roughly 44 percent of all working single parents in the state would get a raise if the state minimum wage were increased to $15. Statewide, 1.3 million children have a working parent who would benefit from a minimum-wage increase to $15 by 2021 equaling 34.3 percent of all children in the state. Researchers also suspect that the increased share of jobs paying low wages in recent years has contributed to a rising share of young people delaying marriage, postponing having children, and continuing to live with their parents longer into adult life. 11 Thus, it is not surprising that many unmarried or childless young adults in their 20s and 30s would benefit from an increase in the minimum wage. The importance of workers pay to their total family incomes Low-wage workers are sometimes characterized as secondary earners, suggesting that their work earnings are discretionary or inconsequential to their family s financial health. The data show that this is not at all the case; the workers who would benefit from increasing the minimum wage to $15 by 2018 in New York City or by 2021 in the rest of the state are often the primary breadwinners for their families. On average, workers who would benefit from increasing the minimum wage to $15 earn 50.3 percent of their family s total income. Among workers age who constitute 35.3 percent of all workers their earnings account for nearly 58 percent of their family s total income. More than 855,000, or 27.0 percent, of all workers are the sole providers of income for their families. Raising the state minimum wage to $15 would provide a significant boost to the incomes of workers. Once the $15 minimum is fully phased-in, workers would receive, on average, $4,800 more in annual income (assuming no change in work hours). 10 economic sectors account for nearly three-fourths of workers Table 2 shows the 10 industries in New York that account for the largest numbers of workers who would be by increasing the state minimum wage to $15 by Combined, these 10 sectors account for just over 2.3 million, or 73.1 percent, of the 3.2 million workers. Retail trade and restaurants have long been recognized as the largest employers of low-wage workers likely to be by raising the minimum wage. The New York Fast Food Wage Board has already acted to institute a wage order that is expected to raise pay for an estimated 132,000 workers employed by large chain restaurants. The wage order would cover roughly one-third of all restaurant workers projected to be by a phased-in $15 minimum wage. (Note that these workers are included in the figures presented here; see endnote 8 for further detail.) Retail has, by far, the greatest number of workers who would be by the proposed minimum-wage increase, with over 555,000 workers likely to get a raise, or 57.7 percent of all retail trade workers. Within retail, just over two-thirds of all grocery store workers (not listed in the table) would be by raising the minimum wage to $15. A large group of workers providing health and human services would also be by a statewide increase in the minimum wage. Among these workers are home healthcare workers in the ambulatory care sector, nursing home workers and providers of services to the developmentally disabled in the residential care sector, and child care and other human EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 17

18 TABLE 2 Top 10 New York industries with the largest numbers of workers who would benefit from increasing the state minimum wage to $15 by 2021 Estimated state Directly Indirectly Directly industry Indirectly industry industry (directly or indirectly) the total population (all industries) 8,635, % 2,415, % 747, % 3,162, % 100.0% private industries (for profit and non-profit) 7,225, % 2,262, % 659, % 2,922, % 92.4% 1. Retail trade 962, % 451, % 103, % 555, % 17.6% 2. Restaurants 537, % 394, % 32, % 427, % 13.5% 3. Home-based and residential care, social assistance, and child care 866, % 311, % 108, % 419, % 13.3% 4. Local government 854, % 109, % 62, % 172, % 5.4% 5. Educational services 450, % 100, % 36, % 137, % 4.3% 6. Finance, insurance, and real estate 694, % 87, % 47, % 134, % 4.3% 7. Construction 393, % 97, % 37, % 134, % 4.3% 8. Transportation, warehouses, and utilities 316, % 91, % 35, % 126, % 4.0% 9. Personal services 127, % 94, % 6, % 101, % 3.2% 10. Durable manufacturing, top 10 industries with greatest number of workers 328, % 65, % 36, % 102, % 3.2% 5,531, % 2,310, % 73.1% Source: EPI analysis of American Community Survey microdata, 2014 service providers in the social assistance sector. Most of these low-wage health and human service workers are employed by nonprofits under contract to state and local governments or are funded under a Medicaid-supported program. In total, there are approximately 420,000 New York workers in these three health and human service sectors who would benefit from raising the minimum wage to $15, representing nearly half (48.4 percent) of all workers in these sectors. Among child care workers, who are included in social assistance, over 60 percent would be, and if home healthcare workers were broken out of the broader ambulatory sector, their share likely would be over 90 percent since they are among the lowest-paid workers in the state. 12 About 20 percent of local government employees would be by the higher minimum wage, although this is one of the largest employment sectors in the state. In total, roughly 172,000 local government workers, including those working for school districts, would be by the proposed increase. EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 18

19 Other sectors among the 10 largest employers of workers include educational services; finance, insurance, and real estate; construction; and transportation and warehousing. Tables showing the breakdown of workers by industry in New York as a whole, in New York City, and in the rest of the state can be found in Appendix Tables A5, A6, and A7, respectively. Conclusion Since its inception in the Great Depression, a strong minimum wage has been recognized as a key labor market institution that, if effectively maintained, can provide the foundation for equitable and adequate pay for American workers. However, the failure to regularly and adequately raise the minimum wage over the past five decades is one of several policy failures that have denied a generation of American workers more significant improvement in their quality of life. In fact, the erosion of the minimum wage has left low-wage workers today earning significantly less (in inflation-adjusted terms) than their counterparts 50 years ago. In the absence of changes at the federal level, state policymakers are taking action into their own hands by updating state labor standards to reflect today s economy and the needs of workers and their families. Raising the New York minimum wage in several steps to $15 would restore its value to a level that ensures full-time work is a means to escape poverty and would provide more than a third of New York s workers with a long-overdue improvement in their standard of living. About the author David Cooper is an economic analyst with the Economic Policy Institute. He conducts national and state-level research on a variety of issues, including the minimum wage, employment and unemployment, poverty, and wage and income trends. He also provides support to the Economic Analysis and Research Network (EARN) on data-related inquiries and quantitative analyses. David has been interviewed and cited by numerous local and national media for his research on the minimum wage, poverty, and U.S. economic trends. He holds a Master of Public Policy degree from Georgetown University. Appendix A: Additional tables and figures EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 19

20 APPENDIX TABLE A1 Estimated effects of a New York state minimum-wage increase to $15 by 2021, by step and region of the state Simulated increases estimated workers 1 Directly 2 Indirectly 3 as a share of all workers Increase in total annual wages for directly and indirectly 4 (nominal) Increase in total annual wages for directly and indirectly (2014$) Cumulative change in average hourly wage of workers (nominal dollars) Cumulative change in average hourly wage of workers (2014$) Cumulative change in average annual income of workers (nominal dollars) Cumulative change in average annual income of workers (2014$) Full state April 1, 2016: $10.50 in NYC, $9.75 outside NYC December 31, 2016: $12.00 in NYC, $10.75 outside NYC December 31, 2017: $13.50 in NYC, $11.75 outside NYC December 31, 2018: $15.00 in NYC, $12.75 outside NYC December 31, 2019: $15.41 in NYC, $13.75 outside NYC* December 31, 2020: $15.82 in NYC, $14.50 outside NYC* July 1, 2021: $16.25 in NYC, $15.00 outside NYC* 8,565,000 1,600, ,000 2,060, % $2,492,021 $2,435,445 $0.73 $0.72 $1,209 $1,182 8,574,000 1,888, ,000 2,399, % $5,513,794 $5,388,615 $1.39 $1.36 $2,298 $2,246 8,588,000 2,158, ,000 2,681, % $8,819,887 $8,409,333 $1.98 $1.88 $3,290 $3,137 8,601,000 2,349, ,000 2,903, % $12,546,922 $11,654,338 $2.58 $2.40 $4,322 $4,015 8,615,000 2,428, ,000 3,015, % $14,353,557 $12,984,245 $2.86 $2.58 $4,759 $4,305 8,629,000 2,439, ,000 3,097, % $15,915,305 $14,019,166 $3.09 $2.72 $5,139 $4,527 8,636,000 2,415, ,000 3,162, % $17,832,642 $15,301,032 $3.39 $2.91 $5,639 $4,839 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 20

21 APPENDIX TABLE A1 (CONTINUED) Simulated increases estimated workers 1 Directly 2 Indirectly 3 as a share of all workers Increase in total annual wages for directly and indirectly 4 (nominal) Increase in total annual wages for directly and indirectly (2014$) Cumulative change in average hourly wage of workers (nominal dollars) Cumulative change in average hourly wage of workers (2014$) Cumulative change in average annual income of workers (nominal dollars) Cumulative change in average annual income of workers (2014$) (including indexed values)* 8,636,000 2,415, ,000 3,162, % $17,832,642 $15,301,032 $3.39 $2.91 $5,639 $4,839 New York City April 1, 2016: $10.50 December 31, 2016: $12.00 December 31, 2017: $13.50 December 31, 2018: $15.00 December 31, 2019: $15.41* December 31, 2020: $15.82* July 1, 2021: $16.25* (including indexed values)* (excluding indexed values)* 4,113, , , , % $1,640,940 $1,603,686 $0.95 $0.93 $1,659 $1,621 4,117, , ,000 1,138, % $3,582,401 $3,501,070 $1.80 $1.76 $3,148 $3,077 4,124,000 1,083, ,000 1,300, % $5,716,596 $5,450,496 $2.50 $2.38 $4,398 $4,193 4,131,000 1,177, ,000 1,419, % $8,132,978 $7,554,401 $3.25 $3.02 $5,733 $5,326 4,137,000 1,142, ,000 1,421, % $8,504,847 $7,693,495 $3.39 $3.06 $5,984 $5,413 4,144,000 1,144, ,000 1,423, % $8,855,881 $7,800,797 $3.52 $3.10 $6,221 $5,480 4,147,000 1,145, ,000 1,443, % $9,545,460 $8,190,339 $3.74 $3.21 $6,614 $5,675 4,147,000 1,145, ,000 1,443, % $9,545,460 $8,190,339 $3.74 $3.21 $6,777 $5,675 4,131,000 1,177, ,000 1,419, % $8,132,978 $7,554,401 $3.25 $3.02 $5,733 $5,326 Areas outside New York City April 1, 2016: $9.75 outside NYC December 31, 2016: 4,452, , ,000 1,072, % $851,081 $831,759 $0.53 $0.52 $794 $776 4,456, , ,000 1,261, % $1,931,394 $1,887,546 $1.02 $0.99 $1,532 $1,497 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 21

22 APPENDIX TABLE A1 (CONTINUED) Simulated increases $10.75 outside NYC December 31, 2017: $11.75 outside NYC December 31, 2018: $12.75 outside NYC December 31, 2019: $13.75 outside NYC December 31, 2020: $14.50 outside NYC July 1, 2021: $15.00 outside NYC estimated workers 1 Directly 2 Indirectly 3 as a share of all workers Increase in total annual wages for directly and indirectly 4 (nominal) Increase in total annual wages for directly and indirectly (2014$) Cumulative change in average hourly wage of workers (nominal dollars) Cumulative change in average hourly wage of workers (2014$) Cumulative change in average annual income of workers (nominal dollars) Cumulative change in average annual income of workers (2014$) 4,464,000 1,074, ,000 1,380, % $3,103,290 $2,958,836 $1.48 $1.41 $2,248 $2,143 4,471,000 1,172, ,000 1,484, % $4,413,944 $4,099,938 $1.95 $1.81 $2,974 $2,762 4,478,000 1,286, ,000 1,594, % $5,848,710 $5,290,750 $2.38 $2.16 $3,668 $3,318 4,485,000 1,295, ,000 1,674, % $7,059,424 $6,218,369 $2.73 $2.40 $4,218 $3,716 4,489,000 1,270, ,000 1,719, % $8,287,182 $7,110,693 $3.10 $2.66 $4,821 $4,136 4,489,000 1,270, ,000 1,719, % $8,287,182 $7,110,693 $3.10 $2.66 $4,821 $4,136 1 estimated workers is estimated from the ACS respondents who were 16 years old or older, employed, but not self-employed, and for whom a valid hourly wage can be imputed from annual wage earnings, usual hours worked per week, and weeks worked in the previous year. 2 Directly workers will see their wages rise, as the new minimum-wage rate will exceed their current hourly pay. 3 Indirectly workers have a wage rate just above the new minimum wage (between the new minimum wage and 115 percent of the new minimum). They will receive a raise as employer pay scales are adjusted upward to reflect the new minimum wage. 4 amount of increased annual wages for directly and indirectly workers. * For the final three steps ( ), it is assumed the New York City minimum wage is indexed to inflation. Source: EPI analysis of American Community Survey microdata, 2014 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 22

23 APPENDIX TABLE A2 Category Characteristics of workers in New York state who would benefit from increasing the state minimum wage to $15 by July 2021 Estimated Directly Indirectly Count Count Count the total population 8,635,791 2,415, % 747, % 3,162, % 100.0% Sex Female 4,268,056 1,278, % 387, % 1,665, % 52.7% Male 4,367,735 1,136, % 359, % 1,496, % 47.3% Age 20 or older 8,402,019 2,264, % 732, % 2,997, % 94.8% Under , , % 14, % 164, % 5.2% Less than 25 1,069, , % 105, % 753, % 23.8% 25 to 39 2,984, , % 287, % 1,115, % 35.3% 40 to 54 2,835, , % 211, % 795, % 25.2% 55 or older 1,746, , % 143, % 497, % 15.7% Race/ethnicity White, non-hispanic 5,023,160 1,126, % 426, % 1,553, % 49.1% Black or African American 1,184, , % 118, % 480, % 15.2% Hispanic of any race 1,501, , % 132, % 777, % 24.6% Asian 752, , % 51, % 282, % 8.9% Other race or ethnicity 173,111 51, % 16, % 68, % 2.2% Education Less than high school 753, , % 74, % 504, % 16.0% High school 1,975, , % 222, % 1,004, % 31.8% Some college 1,606, , % 165, % 727, % 23.0% Associate degree 841, , % 90, % 298, % 9.4% Bachelor s or higher 3,457, , % 195, % 627, % 19.8% Family status Married parent 2,596, , % 185, % 694, % 22.0% Single parent 786, , % 77, % 347, % 11.0% Married, no children 1,563, , % 128, % 434, % 13.8% Single, no children 3,688,553 1,330, % 355, % 1,685, % 53.3% Household income (2014$) Less than $50,000 1,960,544 1,099, % 247, % 1,346, % 42.6% $50,000 $74,999 1,478, , % 181, % 629, % 19.9% $75,000 $99,999 1,304, , % 117, % 407, % 12.9% $100,000 $149,999 1,863, , % 118, % 428, % 13.5% EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 23

24 APPENDIX TABLE A2 (CONTINUED) Category Estimated Directly Indirectly Count Count Count the total population $150,000 or more 2,027, , % 82, % 350, % 11.1% Work hours Part time (<20 hours/ week) Mid time (20 34 hours/ week) Full time (35+ hours/ week) 493, , % 38, % 265, % 8.4% 1,212, , % 122, % 780, % 24.7% 6,930,295 1,529, % 586, % 2,116, % 66.9% Sector Federal government 153, % 0.0% 0.0% 0.0% Private, for profit 6,259,722 2,046, % 573, % 2,619, % 82.8% Local government 854, , % 62, % 172, % 5.4% Private, nonprofit 965, , % 86, % 302, % 9.6% State government 402,426 42, % 25, % 67, % 2.2% Family income-to-poverty-line status At or below the poverty line 494, , % 23, % 372, % 11.8% % poverty 487, , % 48, % 399, % 12.6% % poverty 535, , % 75, % 400, % 12.7% % poverty 1,200, , % 187, % 704, % 22.3% 301% poverty or more 5,856, , % 408, % 1,252, % 39.6% Missing poverty status 62,282 29, % 3, % 32, % 1.0% Children with at least one parent est. # of children Child has directly parent Child has indirectly parent children with parents 3,880,975 1,015, ,912 1,333, % % of all children Source: EPI analysis of American Community Survey microdata, 2014 EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 24

25 APPENDIX TABLE A3 Characteristics of New York City workers who would benefit from increasing the city s minimum wage to $15 by 2018 and indexing it to inflation Category Estimated Directly Indirectly Count Count Count the total population 4,147,178 1,144, % 298, % 1,443, % 100.0% Sex Female 2,018, , % 150, % 726, % 50.3% Male 2,128, , % 147, % 717, % 49.7% Age 20 or older 4,094,335 1,111, % 293, % 1,405, % 97.4% Under 20 52,843 33, % 4, % 38, % 2.6% Less than , , % 37, % 270, % 18.7% 25 to 39 1,656, , % 131, % 572, % 39.7% 40 to 54 1,339, , % 82, % 392, % 27.2% 55 or older 747, , % 47, % 207, % 14.4% Race/ethnicity White, non-hispanic 1,622, , % 93, % 347, % 24.0% Black or African American 812, , % 76, % 310, % 21.5% Hispanic of any race 1,031, , % 82, % 530, % 36.7% Asian 585, , % 37, % 221, % 15.3% Other race or ethnicity 95,392 26, % 7, % 33, % 2.3% Education Less than high school 422, , % 35, % 292, % 20.3% High school 839, , % 78, % 447, % 31.0% Some college 656, , % 58, % 281, % 19.5% Associate degree 295,935 74, % 29, % 103, % 7.2% Bachelor s or higher 1,933, , % 95, % 318, % 22.1% Family status Married parent 1,204, , % 70, % 340, % 23.6% Single parent 392, , % 31, % 170, % 11.8% Married, no children 704, , % 46, % 194, % 13.5% Single, no children 1,845, , % 150, % 737, % 51.1% Household income (2014$) Less than $50, , , % 101, % 670, % 46.4% $50,000 $74, , , % 65, % 271, % 18.8% $75,000 $99, , , % 47, % 180, % 12.5% $100,000 $149, , , % 48, % 179, % 12.5% EPI BRIEFING PAPER #416 JANUARY 5, 2016 PAGE 25