A wage is a fixed payment that is paid on a daily or weekly basis, this payment is made by an employer and given to the employee. Minimum wage is the lowest amount that can be permitted to be paid. Every city and state has a set minimum wage. New York City for example has a set minimum wage of $15 per hour, the highest in the New York State as of now. As stated from the NYS government page for “New York State’s Minimum Wage” for the rest of NY is another story, for example Long Island and Westchester county’s minimum wage was recently raised to $13 at the end of 2019 and for the remainder of the NYS workers, the minimum wage is $11.80. Minimum wage may not be enough considering families’ different circumstances throughout NYS. So, what is considered a livable wage in the state of New York?

New York varies with different average rent prices within the whole state. The most expensive rent price being NYC at the average of $3,282 per month only for a studio according to the CityRealty Staff’s article titled “Average NYC Rent Prices in February 2019”. Although, the lowest average of rent prices in 2019 was in the western part of the NYS, Cheektowaga, NY. Sanziona Boba, the author for rentcafe.com article; “New York State Rent Report – September 2019”, stated that Cheektowaga, NY average rent price in 2019 was as low as $868. There is only a $3.20 difference in both cities minimum wage, but the average rent difference is an outstanding $2,414. The difference is almost four times the average rent of Cheektowaga to pay for NYC’s average rent.

Considering what is known about two cities within the NYS and their differences in average rent and minimum wage, do you consider both wages as livable wages in the state of New York? I find it extremely difficult to believe that for a studio, not a one-bedroom apartment but a studio, in NYC costs an estimate of $3000+ to rent monthly when the minimum wage is only $15. Of course, not everyone’s wage is the same amount but in most places like fast food restaurants and cafés, the wage is most likely set to $15. If a New Yorker has a full-time job of approximately 40 hours weekly and lives in the city, their gross income comes out to be $2,400 monthly, and because it is a gross income, that will exclude the taxes that are taken out every pay check (can be daily, weekly or bi weekly). The amount after taxes is still shorthand to pay for a studio in the city. So, this New Yorker who wants to live in the city must have another option which is to rent a room in an apartment. This is a similar situation that I had been placed myself for the past year. For example, in my case; I live in Yonkers, NY which is part of the Westchester county, 30 minutes away from the city in car, and the minimum wage is $13 and the average rent price is $2,000. As a full-time student and a part-time employee of at least eighteen hours a week, I only make half of the average rent price to live in my own city, and again with a gross income before taxes. That’s where the problem comes in, I cannot only work to try to pay rent a lot more comes with being an adult such as bills, food, transportation and some savings which is an estimate of  $1,000 monthly, more than what I could afford. This then puts into perspective if the minimum wage is even livable wage.

                                                                                                                                        

There a few impactful advantages of minimum wage. In the diagram attached from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) 2020 poverty guidelines, it demonstrates the poverty guidelines within the United States based on the number of families/ household members. The positive side is that the minimum wage of $13- $15 is enough for a single person to work twenty hours for a whole year because if it’s a single person household, it’s a stable amount above the poverty level. A second advantage of minimum wage is that it actually “reduces income inequality while providing an incentive to work” according to Kimberly Amadeo, article writer of “Minimum Wage with Its Purpose, Pros, Cons and History” for The Balance US Economy and News. This means that while the minimum wage avoids different pay rates for every individual, it also provides encouragement to get the work done due to the pay rate being set at a higher rate than what it used to and it can bring about more individuals to avoid welfare. Welfare is a form of government support for citizens at any income level but is mainly to ensure that citizens are meeting their basic needs such as shelter and food. Lastly, another advantage of minimum wage is demand in the economy (Amadeo, Kimberly). As minimum wage increases, an individual is likely to want to spend more because their pay rate has increased. These people who spend, add on to economic growth that increases demand and business revenue, this then generates an increase to businesses to provide more jobs in the economy (Amadeo, Kimberly).

Although one of the biggest advantages of economic growth is towards the businesses, the problem is set in not the minimum wage but in living expenses. As minimum wage increases, it gives landlords opportunities to increase the rent for tenants, creating inflation (Amadeo, Kimberly). The problem becomes: as the minimum wage increases, it allows for workers to pay more for housing. Inflation isn’t just with rental prices but food as well. There is an increase in food prices as the minimum wage increases and that is a problem because rent can increase at a percentage of  at least 1.5 of the initial price, for one-year leases but more for more than yearly leases, and food may increase from a dollar or more depending on the product. This all happens while the minimum wage may only increase by a dollar or just a few cents which isn’t a drastic difference. Yes, one of the advantages of minimum wage is the possibility of providing more jobs but there is more to that. “Minimum wage laws raise business labor costs. That’s already the largest budget item for most of them. When the government forces them to pay more per worker, they hire fewer workers to keep the total labor costs the same” says Kimberley Amadeo. The increase to business labor costs means the increase chances of unemployment, which doesn’t harm an owner of a big business but it does put an individual and families at risk with many factors and to an extent, poverty due to workers competing for fewer job positions. Small businesses on the other hand might not be able to operate with a few number of workers so the outcome of that is possibly being forced to declare bankruptcy (Amadeo, Kimberly).

There has been a debate between two economists over the topic of the effects of minimum wage law. Peter Cappelli, an economist and Professor at the Wharton School, and Walter Block, economist and instructor at the Loyola University New Orleans, wrote a series of letters to each other debating this topic. Instructor Block argues in his first letter “In all of my microeconomics classes I demonstrate through supply and demand what countless others have done before me: if a minimum wage law stipulates a rate of pay above equilibrium, it will cause unemployment for unskilled workers whose (marginal revenue) productivity is below that level”. Professor Cappelli responds to Block’s letter with: “I’ve been around the topic of minimum wages since 1974… The view of opponents like Thomas Sowell is that minimum wages should price low marginal ability workers out of jobs. The advocates argue that the benefits in terms of higher incomes for those who have jobs are worth the cost of higher unemployment among low value workers… Some studies showing no effects on employment when the minimum wage rises, some showing relatively small effects with the differences varying with the datasets being used”. To sum this up; Block sees the negative impacts on employees, especially those who have less education but Cappelli states that his studies say otherwise because he has seen minimal effect, two completely different views on the effects of the minimum wage law from both economists.

In conclusion, minimum wage is the lowest pay rate permitted and as it increases so will other factors along with it. Rent and food inflation increase by a percentage every year as the minimum wage increases by a few cents to a dollar in the NYS, excluding NYC. The problem that springs up from this effect the lower class because it consists of more citizens who are getting paid the lowest amount in one of the most expensive states to live in, the NYS. I was interested in this research topic because it has had a direct influence in my life. When I was a fulltime worker getting paid minimum wage in Yonkers (Westchester County), I was only making enough money to pay my rent amount for the month. I found it hard to believe that I am supposed to make enough for my rent, utilities, food and transportation with the minimum wage set for my city. I don’t agree that the minimum wage given throughout NY is considered a livable wage. My reason for that is because as the wage increases, so do other living factors but the ones who get affected the most are those especially of lower class and this can lead to borderline poverty or even homelessness.