NY $15 Minimum Wage Could Cripple Health Care Industry

Connor D. Wolf | Reporter

New York health care associations warned state officials during a budget hearing Monday that raising the minimum wage to $15 an hour would have a devastating impact on the state’s health care industry.

Hospitals and clinics are particularly vulnerable because regulations make it more difficult for them to adjust for increased wages. The state currently has a minimum wage of $9 an hour, but a proposal by Gov. Andrew Cuomo could gradually raise it to $15 — the proposal just needs approval from the state legislature.

“While understanding the need for hardworking New Yorkers to achieve a decent wage,” Greater New York Hospital Association President Kenneth Raske said according to The Journal News. “We must also make sure health-care providers receive adequate reimbursement so they can pay the higher salaries a minimum wage increase will create.”

The Healthcare Association of New York State estimated the increase could cost hospitals $570 million. New York is poised to potentially become the first state with a $15 minimum wage. Supporters say the policy will help the poor by allowing them to more easily afford basic necessities, which could stimulate economic activity.

Sixty-two percent of state residents support the increase, according to a recent Quinnipiac University poll. Critics, however, assert that many businesses don’t have the profits to handle the added cost of labor. The policy could force businesses to increase prices, hire fewer workers or even fire some existing employees. In some cases, the businesses may have to close.

Seattle was the first to pass a $15 minimum wage in June 2014, and many businesses have already reported problems. Cuomo has proposed and implemented a number of tax cuts to help relieve costs for small businesses in the state. His office estimated the cuts will save small businesses nearly $1.2 billion by 2021.

Beyond his proposal, the governor has already done a lot to advance the policy in the state. He unilaterally raised wages for those working in the fast-food industry, state university workers and state employees. Additionally, New York City Mayor Bill de Blasio announced Jan. 6 a plan to raise the minimum wage to $15 an hour for all city workers.

Health care is not the only industry fearful of the increases’ impacts, the New York State Association of School Business Officials warned Oct. 30, for example, that the proposal could cost state school districts $276 million. The New York Farm Bureau stated Dec. 21 the proposal would put severe stress on farmers and cause higher food prices.

The statewide increase will still need support from at least some Republicans in the New York Senate.

California, Massachusetts and Florida are also considering their own $15 minimum wage proposals.

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