New York’s legislature approved a budget that hikes the stateâ€™s minimum wage to $9 per hour. But taxpayers, not businesses, could actually be the responsible party for paying those extra wage costs, if a closed-door tax credit agreement among politicos made the final budget cut.
The new wage minimum will be phased in over three years, United Press International reports. The current level of $7.25 will hike to $8 by the end of 2013; to $8.75 by the end of 2014; and to $9 by the end of 2015, UPI says.
The minimum wage increase reflects a win for Democrats, who have fought hard against Republicans and business interests who see the mandate as a wall to economic growth. But the big loser may actually be the taxpayer, The Associated Press reports. Original budget language for the â€œminimum wage reimbursement creditâ€ actually says employers will receive compensation for their higher wage costs â€” by way of taxpayers, AP says.
Once the minimum wage rises by $1.75- to its full $9-per-hour mandate, employers will only be paying 40 cents of that difference, AP reports. The remaining $1.35 will be paid by taxpayers, in the form of a reimbursement credit that goes back to employers.
â€œItâ€™s a big subsidy for the corporate low-wage economy,â€ said Mark Dunlea of the Hunger Action Network advocacy group, in the AP report.
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