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 by Kevin Jack, Deputy Director
"The prosperity of everyone in the country" depends on the "ability of the common man to support himself."
— U.S. Secretary of Labor Frances Perkins, People at Work, 1934
New York State and minimum wage laws have a long history together. In fact, this year marks the 90th anniversary of the state’s first minimum wage legislation. On May 1, 1933, during the depths of the Great Depression and just two months after the inauguration of Franklin D. Roosevelt as U.S. president, then-Governor Herbert H. Lehman signed into law a minimum wage bill for New York. At the time, many workers fell victim to wage cutting by employers and had little or no protections. Frances Perkins, New York’s former Industrial (Labor) Commissioner and Roosevelt’s new U.S. Secretary of Labor, played a key role in drafting the new law.
Notably, the new law applied only to women and minors working in occupations other than domestic service and farm work. Donald Cullen of Cornell University wrote that the new law excluded adult males for two reasons: concern that the courts would not uphold the regulation of men’s wages, and the fear by unions that a “minimum wage in law would become a maximum rate in practice.”
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1933 Law Overturned
Just three years later, in March 1936, New York’s Court of Appeals unexpectedly ruled that the state’s minimum wage was unconstitutional. The U.S. Supreme Court upheld that decision in June 1936. Both courts ruled New York’s law deprived employers of their right to bargain freely with workers. This decision came after the U.S. Supreme Court in 1935 rejected the establishment of the first federal minimum wage as part of 1933’s National Industrial Recovery Act.
New Law Ruled Constitutional
By March 1937, however, opinion in the U.S. Supreme Court had shifted enough to uphold the constitutionality of minimum wage laws for the first time. One month later, New York’s Legislature passed, and Governor Lehman signed, a new minimum wage law for the state. New York’s minimum wage law expanded to include men in 1944. At the federal level, the Fair Labor Standards Act, shepherded by U.S. Labor Secretary Perkins, was signed into law by Roosevelt in October 1938, establishing the first national minimum wage.
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Wage Boards
Under the New York law passed in 1937, no general minimum wage was set. Instead, the statute gave the Industrial Commissioner the power to create a three-person wage board for any industry or occupation that needed a minimum. After public hearings, the Commissioner could establish wage standards, based on the recommendations of the wage board. The guiding principle was that women and minors should receive wages “sufficient to provide adequate maintenance and to protect their health." For the use of wage boards, the State Department of Labor published annually a "cost-of-living" budget for a single working woman living as a member of a family.
Dr. Cullen of Cornell concluded that New York’s 1937 minimum wage law “clearly was one of the most effective of its kind in the country.” He also noted the wage board approach to rate setting had a reputation for flexibility. However, wage boards were very slow in two respects. First, they added industries covered by a minimum wage at a glacial pace. Second, they didn’t rush in once an industry was covered. It typically took 18-24 months between the time when a board decided that certain workers needed a legal minimum wage and the time when this need was actually met.
New Minimum Wage Law
In response to these shortcomings, then-Governor Nelson A. Rockefeller proposed New York’s first statewide general minimum wage law in early 1960. The bill he signed set New York’s hourly minimum wage at $1.00, effective October 1, 1960. Under the new law, industry boards could still be appointed where needed (e.g., the Fast Food Wage Board appointed in 2015). These boards could recommend an industry minimum wage above the general minimum wage. For a history of New York’s general minimum wage since 1960, see: https://dol.ny.gov/history-minimum-wage-new-york-state.
The recently enacted 2023-24 State Budget increased New York’s minimum wage in 2024-26. Starting on January 1, 2024, the hourly minimum wage will increase from $15.00 to $16.00 in the Downstate region—consisting of New York City and Nassau, Suffolk, and Westchester counties— and rise from $14.20 to $15.00 in the rest of the state. In 2025 and 2026, the minimum wage will then increase by another $0.50 yearly, reaching $17.00 in the Downstate region and $16.00 in the balance of New York. Starting in 2027, annual increases in the state’s minimum wage will be tied or indexed to changes in the Northeast Consumer Price Index for Urban Wage Earners and Clerical Workers (“Northeast CPI-W”).
New York’s new minimum wage law also includes a few exceptions that prevent changes to the minimum wage from occurring during years when: consumer prices drop; unemployment rises sharply; or the state loses non-farm jobs for an extended period. If one or more of the following three exceptions is triggered in a given year, no change will be made to the state’s minimum wage:
- Over-the-year changes in the Northeast CPI-W are negative
- The most recent 3-month average statewide unemployment rate (seasonally adjusted) rises by at least 0.5 percentage points relative to the lowest rate in the previous 12 months (aka “Sahm Rule Recession Indicator”)
- The number of total non-farm jobs in the state (seasonally adjusted) has decreased over the past 3- and 6-month periods
It is important to note that these annual exceptions may only pause changes to the minimum wage for up to two consecutive years.
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Who’s Affected by the New Minimum Wage?
We analyzed 2022 data from the Current Population Survey of households to estimate the number and demographics of employed New Yorkers affected by the increase in the minimum wage, effective January 1, 2024. This analysis combines two groups impacted by the boost in the minimum wage: Downstate workers whose hourly minimum wage will increase from $15.00 to $16.00, and workers in the rest of the state who will see a rise from $14.20 to $15.00.
The scheduled 2024 increase in the state’s minimum wage affects some 1.1 million New Yorkers, or about 12% of the state’s current total of 9.1 million workers. Women comprise a disproportionate share of the affected workers (i.e., those earning below 2024’s minimum wage). More than six in ten (62%) of affected workers in the state are female, while this group accounts for just under one-half (48%) of New York’s overall number of employed.
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Part-time workers are also represented disproportionately in the directly affected group—45% versus only 17% of the state’s total employment. Similarly, young workers (ages 16-24) make up more than one-third (34%) of those directly affected, but only 10% of the state’s total employed. In other words, young workers’ share of those directly affected by the wage increase is more than triple their share of overall employment in the state.
Almost two-thirds (63%) of the workers in New York making under the 2024 minimum wage are people of color. Here, this refers to everyone who is not in the “White, non-Hispanic or Latino” category. We note that this percentage share is significantly larger than this group’s share of statewide employment (43%).
Among workers aged 25 and older in New York State, those with a high school diploma/GED or less account for about 57% of those making under the 2024 minimum wage. This is about twice as much as their share (28%) of workers in the state.
Summing Up
While the goal of a minimum wage may have seemed unattainable to workers’ rights pioneer Frances Perkins 90 years ago, her persistence and tenacity helped to make it a reality. To learn more about the new rules affecting New York State’s minimum wage, see: https://dol.ny.gov/minimum-wage-0.
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  by Konstantin Sikhaou, Labor Market Analyst, North Country Region
“The health care and social assistance sector will continue to be a key segment of the North Country's regional economy.”
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The North Country’s regional labor market has experienced uneven job growth as it continues to recover from the negative effects of the pandemic. Between 2021 and 2022, the region’s average private sector job count grew by 1,850, or 1.8%, to 103,270, per data from the Quarterly Census of Employment and Wages (QCEW).
Over the same time frame, the employment count in the region’s private health care and social assistance sector (HC&SA) fell by 380, or 1.7%, to 22,470. Despite this annual job loss, there remains optimism for long-term growth potential in this vital segment of the North Country’s regional economy.
Major Regional Employer
The health care and social assistance sector (NAICS 62) is the largest private sector employer in the region, accounting for over one in five jobs. The HC&SA sector consists of four main industries: ambulatory health care (NAICS 621), hospitals (NAICS 622), nursing and residential care (NAICS 623) and social assistance (NAICS 624). An important contributor to the North Country’s economy, HC&SA paid out more than $1.34 billion in wages in 2022, with an average annual salary of $59,800.
With annual average employment of 6,890 in 2022, hospitals accounted for the largest share (30.7%) of the region’s HC&SA workforce. At $76,900, hospitals also had the highest yearly wage of any industry in the HC&SA sector.
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In 2022, social assistance employed 5,690 workers in the North Country, making it the second largest industry in the HC&SA sector. Some sub-industries within the broader social assistance industry include individual and family services, vocational rehabilitation and child day care. At $42,400, social assistance paid the lowest annual wage of any industry within the HC&SA sector in 2022.
The third largest HC&SA industry in 2022 was ambulatory health care, with 5,630 employees in the North Country. This industry consists of offices of physicians and dentists, diagnostic labs, outpatient care centers and home health care services. Ambulatory health care facilities in the North Country paid an average annual wage of $65,000, the second highest of any HC&SA industry in 2022.
The nursing and residential care facilities industry had the smallest share (18.9%) of regional HC&SA employment in 2022, with an average of 4,250 workers. The annual average wage was $48,800, the third highest within the region’s HC&SA sector.
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Special Role of Hospitals
As noted in last month’s newsletter, hospitals, like universities, serve as “anchor institutions” in regional economies, since they are strongly connected to their local area via a combination of real estate, infrastructure and human capital. In addition, hospitals tend to not only employ large numbers of workers, but also tend to be less vulnerable to recessions than other industries.
Some hospitals that are among the largest private sector employers in the North Country include: Samaritan Medical Center (Jefferson County), Canton-Potsdam Hospital (St. Lawrence County), Adirondack Medical Center (Franklin County) and Champlain Valley Medical Center (Clinton County).
Recent Developments
Earlier this year, the State awarded millions of dollars to improve health care facilities in the North Country under the Statewide Health Care Facility Transformation Program. Facilities in St. Lawrence and Jefferson counties are slated to receive more than $45 million in funding.
Canton-Potsdam Hospital in Potsdam (St. Lawrence County) received $7 million to preserve and expand obstetric services. They will receive another $3 million to build a new family medicine clinic. The Clifton-Fine Hospital in Star Lake (St. Lawrence County) received $16.2 million to upgrade and modernize the hospital’s infrastructure. River Hospital in Alexandria Bay (Jefferson County) was awarded $10.7 million to upgrade infrastructure and for program growth.
In addition, Citizen Advocates, which provides mental health services across the region, was awarded $7.4 million for capital improvements at two of their sites. Finally, the United Cerebral Palsy Association of the North Country received just over $900,000 to renovate care centers in Canton (St. Lawrence County) and Malone (Franklin County).
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Looking Ahead
Going forward, three key factors are expected to contribute to continued employment growth in the HC&SA sector: an aging population, advances in technology and increased investment in the sector. The North Country’s HC&SA sector is expected to be a beneficiary of this growth.
Analysts at the State Labor Department project that HC&SA sector employment will grow by 16% in 2018-28, or four times faster than the region’s overall projected growth rate. Projected sector growth is particularly focused in ambulatory health care (+29.4%). These factors, along with state investments in local health care facilities, offer a positive outlook for regional job growth, ensuring the health care and social assistance sector will continue to be a key segment of the North Country’s regional economy.
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 In April 2023, New York State’s seasonally adjusted private sector job count decreased over the month by 25,700, or 0.3%, to 8,225,700. In addition, the state’s seasonally adjusted unemployment rate decreased from 4.1% to 4.0% in April, while New York’s seasonally adjusted labor force participation rate rose from 60.7% to 60.8%.
Capital
Over the past year, the private sector job count in the Capital Region rose by 8,600, or 2.0%, to 434,800 in April 2023. Gains were largest in leisure and hospitality (+4,700), professional and business services (+1,700), education and health services (+1,600), natural resources, mining and construction (+900), financial activities (+400) and other services (+400). Losses occurred in trade, transportation and utilities (-600) and manufacturing (-500).
Central NY
The number of private sector jobs in the Syracuse metro area increased over the past year by 6,000, or 2.4%, to 256,700 in April 2023. Job gains were greatest in trade, transportation and utilities (+2,400), professional and business services (+2,100), leisure and hospitality (+1,000), natural resources, mining and construction (+400) and other services (+400). Losses occurred in manufacturing (-500) and information (-200).
Finger Lakes
From April 2022 to April 2023, the Rochester metro area’s private sector job count rose by 5,600, or 1.3%, to 449,500. Gains were largest in education and health services (+4,100), leisure and hospitality (+1,600), other services (+700) and manufacturing (+300). Losses were greatest in trade, transportation and utilities (-500), natural resources, mining and construction (-300) and professional and business services (-300).
Hudson Valley
Over the past 12 months, the number of private sector jobs in the Hudson Valley grew by 11,900, or 1.5%, to 798,000 in April 2023. Gains were largest in leisure and hospitality (+6,600), education and health services (+5,700), natural resources, mining and construction (+2,300) and other services (+800). Losses were greatest in professional and business services (-1,000), information (-800), trade, transportation and utilities (-800) and manufacturing (-700).
Long Island
For the year ending April 2023, private sector jobs on Long Island increased by 10,100, or 0.9%, to 1,132,900. Employment gains occurred in professional and business services (+6,300), education and health services (+4,300), leisure and hospitality (+3,300), other services (+1,400), natural resources, mining and construction (+1,100) and manufacturing (+800). Job losses were largest in trade, transportation and utilities (-6,500) and financial activities (-500).
Mohawk Valley
For the 12-month period ending April 2023, the number of private sector jobs in the Mohawk Valley region rose by 900, or 0.7%, to 138,400. Over-the-year employment gains were greatest in education and health services (+900) and leisure and hospitality (+500). Job losses occurred in professional and business services (-300) and natural resources, mining and construction (-200).
New York City
The private sector job count in New York City rose over the past year by 150,800, or 3.8%, to 4,081,600 in April 2023. Gains were greatest in education and health services (+58,300), leisure and hospitality (+48,300), professional and business services (+25,900), financial activities (+13,900), natural resources, mining and construction (+7,300) and other services (+5,100). Losses occurred in trade, transportation and utilities (-8,800).
North Country
For the 12-month period ending April 2023, the private sector job count in the North Country region fell by 2,500, or 2.4%, to 101,700. Over-the-year employment losses were largest in trade, transportation and utilities (-700), leisure and hospitality (-600), manufacturing (-600), natural resources, mining and construction (-300) and information (-200).
Southern Tier
For the year ending April 2023, the number of private sector jobs in the Southern Tier decreased by 500, or 0.2%, to 214,700. Employment gains were greatest in leisure and hospitality (+800), manufacturing (+300) and other services (+200). The largest losses were in education and health services (-500), professional and business services (-500) and trade, transportation and utilities (-500).
Western NY
Over the past 12 months, the private sector job count in the Buffalo-Niagara Falls metro area rose by 9,900, or 2.2%, to 461,200 in April 2023. Gains were largest in professional and business services (+3,900), leisure and hospitality (+2,100), manufacturing (+1,500), trade, transportation and utilities (+1,300), education and health services (+1,100) and other services (+1,000). Job losses occurred in financial activities (-1,100) andinformation (-400).
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