New York City is one of those places that will make you reevaluate everything you thought you ever knew about budgeting your money. I grew up in the midwest where the average rent for a decent apartment is about $600 per month, and you can buy a three bedroom, two-bath home with a driveway, front yard, back yard and a white picket fence for around $100,000 on the low end and about $250,000 on the high end. When I graduated from my midwest college my first job paid $45,000/year. Living in the midwest, I used to think that was all the money in the world; at that salary all my bills were paid and I even paid off my first adult car in under 2 years. I lived with two frat brothers (one of whom you all know as The Fed) in a 3-level, 3 bedroom townhome complete with a garage and a built in washer and dryer. Our rent? $750 per month. Total. As in, we each paid $250 a month (and we had the au-da-ci-tyyyyy to actually complain about it). Looking back on it now as a New Yorker, I realize that we had absolutely no clue as to how low the cost of living was (and still is) in the midwest.
By contrast, in New York City, the average rent for a decent apartment is $1500 per month...for a studio. Oh you wanted a separate bedroom? Bump that up to at least $2,000 per month. Two bedrooms you say? $3,000 per month and up. Now if you want to be a home owner here, a one-bedroom apartment sells for $500,000 toward the low end, $600,000 toward the high end. Two-bedrooms sell for $750,000 and up. Three-bedrooms are easily over $1 million. And these are not very spacious places we're talking about either; your average one bedroom in Manhattan is no larger than 800 square feet regardless of whether you're renting or buying. If you have a car (lord forbid), parking can run you about $400 a month. A monthly subway pass runs a little over $100, and if you're commuting in from Long Island or upstate, it's more than that. All of this to say, if you live here in New York City then you're living in the city with the highest cost of living in the United States of America hands down. So it's safe to say that if you've been making minimum wage here ($7.25/hr), you've been performing nothing short of a miracle every month to make ends meet. Against that background, it's not hard to see the need for the latest proposal in City Council to raise the minimum wage from $7.25/hr to $10.00/hr with benefits, $11.50/hr without benefits.
The "Living Wage" bill currently on the floor of the New York City Council seeks to raise the minimum wage paid to workers on businesses that make over $5 million per year in revenue and receive tax subsidies from the City in excess of $1 million per year. Even though small businesses that do not fit this criteria would be exempt, this has not stopped Mayor Bloomberg and others from taking the position that this bill will kill jobs and hurt small businesses. The Speaker for the City Council, Christine Quinn (D), who has her eye on Bloomberg's job, has avoided making any public statement on the bill. It is also no secret that Quinn has heavy ties to the real estate community which would clearly be effected by the bill.
New York's City Council has 51 members (46 Democrats, 5 Republicans). Similar to our federal process, Mayor Bloomberg has the authority to veto any law passed by the Council. If a law is vetoed, a 2/3rds majority vote (34 Council members) can overrule his veto. At the moment, there are currently 30 City Council members who are in support of the living wage bill, just 4 votes shy of the necessary veto-proof majority. Many groups, such as Riverside Church, are holding rallies in support of the bill Monday evening before it goes to the floor for a vote on Tuesday.
This law has a chance to make an impact for many New Yorkers who are getting by living check to check on minimum wage. Opponents to the law seem to think that it would have some kind of detrimental effect on New York's economy, but somehow I don't see that happening here. Maybe it has something to do with the fact that New York's real estate market, legal market, fashion market, accounting market, stock market, movie market, TV market, news market, advertising market, food market, etc. are all turning record profits. Or maybe it has something to do with the fact that other major cities, like L.A. and Philly, have already passed similar measures and their economies did not die as a result. Call me crazy, but somehow I don't see an extra $3 bucks an hour turning Manhattan into Mad Max Beyond the Thunderdome. And since big business is not going to raise the minimum wage on their own, this legislation may be the only way to bring some parity to the situation.
1. Should New York pass this law?
2. Is $10/hr enough to make it in New York City? In your town?
3. If businesses are receiving tax subsidies, do they have an obligation to pay a higher wage to their workers?