A Bad Deal for New York's Low-Wage Workers

04/04/2013 10:25 pm ET | Updated Jun 04, 2013

By their nature, compromise agreements don't make everybody happy, but the new minimum wage deal that cleared the State Legislature is a particularly lousy compromise.

While it will definitely help some workers in the short-term, it will leave taxpayers subsidizing age discrimination and create a new "maximum wage" that keeps people in poverty.

Here's why it will do more harm than good: It will eventually raise the minimum wage to $9 an hour by 2016 and includes a mechanism for the commissioner of Labor to increase wages for tipped workers, but does not ensure it goes up with inflation, which means those workers will essentially be running in place.

And it includes tax subsidies that will let businesses pay teenagers less than minimum wage, which gives an incentive to fire the teens after a year or so and hire another.

Because the wage doesn't automatically increase with inflation, working people will be forced to come back in a few years to fight for another raise. And the tax break encourages huge corporations to lay off adults and hire teenagers. This deal, which incentivizes ageism, will leave thousands of New York's families unable to pay for bills, rent, food, and other expenses. This kind of corporate giveaway has no place in a deal that was supposed to help working people get ahead. Working New Yorkers need and deserve more.

In early March, the New York State Assembly passed a bill that would raise the minimum wage to $9 an hour and index it to inflation. There were no exemptions for tipped workers or corporate subsidies.

A report by the Fiscal Policy Institute and the National Employment Law Project said raising the minimum wage for all of the state's 1.7 million law-wage workers to $9 all at once on Jan. 1, 2014, would give a full-time minimum wage worker $50 more in 2014, $936 more in 2015, and $1,352 more in 2016. The report said the increase would boost the state's economy by $1.2 billion and support the creation of 10,000 full-time jobs.

So far, so good.

Then the bill went to the Senate, where Republicans and the Independent Democratic Caucus (IDC) tried to cut tipped workers out of the deal, freezing the tipped minimum wage, which is only around $5 per hour.

Freezing the minimum for tipped workers would mean $1.20 less for waitresses and waiters, $1.35 less for car-wash workers, and $1.35 less for hotel workers and other service workers.

Thankfully, the Senate was overruled on this, and the commissioner of Labor will have the opportunity to raise the minimum wage for tipped workers.

As if that wasn't bad enough, Senate leaders hatched an 11th-hour deal to give a tax credit/subsidy to employers that hire teenagers. Come on, let's get real. That means employers will have an incentive to hire young workers and then fire them after a year so they can get more tax credits. To make matters worse, that subsidy will cost taxpayers up to $40 million.

This is a terrible deal that sets a terrible example for other states -- and it comes at a time when thousands upon thousands of low-wage workers across the city are banding together in an attempt to get better wages, job protections and benefits.

This deal hurts those men and women -- waiters, waitresses, car wash workers, grocery store cashiers and airport security guards -- who already struggle to feed and clothe themselves and their families.

I say this as a woman of color, a latina, who waited tables and worked in fast food restaurants when I was a teenaged, single mom. Like many others in my Bronx neighborhood, I experienced first-hand the struggle to make ends meet in an industry that keeps growing exponentially while keeping most of its workers at below poverty levels.

This "compromise" deal is a perfect example of what happens when business interests are favored over the needs of hard-working taxpayers. Providing tax incentives for companies to promote age discrimination is a slap in the face to the working men and women struggling to make ends meet.

No two ways about it -- this "compromise" is just a bad deal.