Labor Unions Crying Foul Over Subsidy

Joseph Byrne Monday, April 15, 2013

Several labor unions are claiming that Wal-Mart made campaign contributions in exchange for a subsidy for those employers who are being hit hard with the higher minimum wage in New York. This unusual provision is one that has been under fire by many, simply because it is taking money away from taxpayers and giving it back to big business in exchange for their cooperation.

Senate Republicans are saying that this claim is nonsense. Republic Spokesman, Scott Reif says that “the subsidy was a legislative compromise to avoid losing jobs as a result of increasing the minimum wage.”

Governor Cuomo and the Legislature approved in March increasing minimum wage to $9 an hour over the next three years. Currently, the minimum wage is at $7.25. The passage of the increased minimum wage included a taxpayer-funded subsidy estimate at between $20 to $40 million a year with no cap on the payments. This amount will cover the tax credits for seasonal employees who are 16 to 19 and are still in school as well.

Whether Wal-Mart did or not, it remains to be seen whether this increase in wages is going to have the stimulating effect on the economy or not. That will take some time to determine. 

joeb@longislandyellowpages.com

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