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Unclear future for minimum wage

By Sean Mulligan (Special to The Chronicle) Minimum wage has the potential to be $18 an hour.

Hofstra’s Labor Studies Program and the Department of Economics commemorated this year’s 75th Anniversary of the Fair Labor Standards Act of 1938 by hosting a forum on minimum wage and wealth inequality.

James Parrott, co-director of the Fiscal Policy Institute and Gregory DeFreitas, HCLAS chairman, hosted the forum.

The forum was initially expected to feature District of the U.S Department of Labor’s Office on Long Island Irv Milioner, but he was unable to attend because of the recent government shutdown.

The Fiscal Policy Institute is an independent organization based in Albany and New York City that researches New York State’s tax system and fiscal situation. The FPI also publishes a biannual report on the economic situation for New York’s working population.

DeFreitas understood that young people have been hit the hardest by the economy.

“The last five years and the fraction of young people with jobs in Long Island, NYC and actually nationwide, is at historic lows and more and more young people when they try to get jobs, the best they can get is part time jobs,” said DeFreitas.

“Nationwide there has also been an effort to raise the national minimum from $7.25 an hour to $10.10 an hour, by 2015 but now that’s been shoved aside by the vicious policy battles in Washington [DC],” DeFreitas said.

James Parrott, co-director of the Fiscal Policy Institute, said that states have begun to focus on helping the unemployed and underemployed through their own efforts that focus on minimum wage reform.

“US Productivity has grown 1.7 percent since 1970,” Parrott said. “If minimum wage kept up with this growth of 1.7 percent, minimum wage would be $18 an hour.”

Nick Bourgade, junior management major, believed that an $18 an hour minimum wage would be too high.

“I feel like there should be a difference in minimum wage and living wage. You have enough money to get a decent apartment and eat three square meals a day [with $18 an hour],” Bourgade said. “Minimum wage should be for teenagers. I think $9 an hour is fair for that.”

Raymond Navarro, senior legal studies and business major, was fine with the current minimum wage and believes that there are many opportunities to find higher paying jobs.

“For the time being, yeah, it gave me a job and the next year I got a job at Ikea at $9 an hour,” said Navarro.

Earlier this year, New York State enacted legislation which would enforce employers to give minimum wage employees $9 an hour by 2016. However, Parrott criticized New York State’s minimum wage reform attempt because it has no provision for tipped workers, stranding workers such as waiters at the state tipped minimum wage of $2.25 an hour.

Parrott also called the legislation’s, “Minimum Wage Reimbursement Credit,” purpose into question because the state would only offer tax reimbursements to employers who paid exactly minimum wage. If an employer gave a minimum wage employee a raise, the employer would not be entitled to a tax credit.

“Businesses will get $0.75 for every hour a 16-19 year old works at minimum wage. This gives businesses the incentive to cap wages at the low end and not offer raises as often. In a hypothetical situation, Walmart could make $85 million in tax reimbursements for keeping employees at minimum wage,” said Parrott. “Something as perverse as a tax credit to employers who get rid of adult workers and employ younger workers, and pay them right at the minimum wage. This should be an embarrassment to Albany,” added Parrott.

Parrott argued that pairing New York State’s minimum wage with inflation indexation could strengthen the state’s economy.

“It could restore lost purchasing power and raise the wage floor for low wage jobs. It’s targeted to help low income families and it wouldn’t cost jobs. It would actually be important in maintaining wages and addressing income inequality,” explained Parrott.

Parrott concluded from data collected by the Fiscal Policy Institute that one out of six Nassau County workers would benefit from minimum wage increases.

“An estimated 112,000 Nassau County residents will benefit directly or indirectly from this year’s minimum wage increase,” said Parrott.

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