Governor Hochul Announces Plan to Raise the Minimum Wage Annually, Address the Rising Cost of Living

Governor Kathy Hochul today announced, as part of the 2023 State of the State, a transformative plan to help low-wage New Yorkers meet the rising cost of living by indexing New York’s minimum wage to inflation. Under the proposal, each year, the State’s minimum wage would increase at a rate determined by the Consumer Price Index for Wage Earners for the Northeast Region – the best regional measure of inflation. The proposal is expected to benefit hundreds of thousands of minimum wage workers across New York State. The Governor also unveiled a new suite of bold initiatives that will modernize and streamline the State’s proven workforce development infrastructure to ensure New Yorkers have the skills they need to thrive in today’s economy, and to help rebuild a modern public sector workforce.

“If we really want to tackle the affordability crisis head-on, we must recognize that low-wage workers in New York have been hit hardest by the increases in costs of living,” Governor Hochul said. “Our commonsense plan to peg the minimum wage to inflation will not only put more money into the pockets of hundreds of thousands of hardworking New Yorkers, it will also provide predictability for employers and spur more spending in local economies and businesses.”

The Governor’s proposal would increase the State’s minimum wage by the growth in the year-over-year Consumer Price Index for Wage Earners (CPI-W) for the Northeast Region. To ensure that no single-year increase would threaten employment, annual increases would be capped. In addition, the proposal would also allow for an “off-ramp” in the event of certain economic or budget conditions.

New York State Department of Labor Commissioner Roberta Reardon said, “By investing in our workforce, we are investing in the future of New York State. Governor Hochul has already accomplished so much since taking office, and she continues to keep her eye on the big picture. The Governor’s continued commitment to workforce development ensures that no New Yorker will be left behind in the economy of tomorrow.”

Indexing the minimum wage to inflation will help to maintain the purchasing power of workers’ wages from year to year. And while increasing the minimum wage would benefit all low-income workers, it would particularly benefit women and people of color who comprise a disproportionate share of minimum wage workers.

Seventeen other states either currently tie their minimum wage to inflation or some other economic formula or are slated to do so, including three states which have minimum wages at or above $15 in 2023. Economic research shows that raising the minimum wage can lead to reductions in poverty, reduced social assistance spending, stimulative spending, improved worker productivity, and other benefits.

Governor Hochul has supported previous measures to help workers meet rising costs and cope with inflation. Last year, the Governor announced a minimum wage increase for counties outside of New York City, Long Island, and Westchester to $14.20 per hour. The Governor also secured a minimum wage increase for home health aides as part of the FY 2023 budget.

Modernizing and Streamlining the State’s Training and Employment Infrastructure

Governor Hochul also announced steps to modernize New York’s workforce development system, enhance the State’s talent pipeline, and help workers and employers to meet the needs of the 21st century economy. The Governor will transform the New York State Department of Labor’s (NYSDOL) Career Centers into Community Training and Career Centers, a one-stop-shop for New Yorkers looking for new job opportunities. In these revitalized centers, additional professional skills trainers will provide unemployed and underemployed New Yorkers with no-cost training in high-need areas, such as digital and financial literacy and entrepreneurship. This will be paired with a new, large-scale, on-the-job training program to upskill thousands of workers each year, focusing on high-demand industries and hard-to-fill job titles.

The Governor will also direct NYSDOL and the State University of New York (SUNY) to establish new partnerships between the Career Centers and SUNY Educational Opportunity Centers to provide New Yorkers seamless access to a wide variety of job preparedness and specialized training services at no cost. This new integrated approach will enhance the proven NYSDOL Career Center model by supplementing its services with SUNY’s robust training and educational arm, which can pivot in real-time to best meet the needs of businesses and provide immediate access to tuition-free training for job seekers. NYSDOL and SUNY will work to braid federal funding and partnerships with other state agencies and community resources to help more New Yorkers access training opportunities and receive comprehensive wrap-around services. This will ensure that all New Yorkers are ready for today’s job market through attainable diplomas and credentials paired with digital literacy and professional skills training, résumé development, job search and networking support, and other services that reduce barriers to employment.

Rebuilding New York’s Public Workforce

Governor Hochul also mapped out a plan to improve the New York State Civil Service system to rebuild the public sector workforce to address a shortage of more than 15,000 workers with more than 26 percent of the state workforce becoming retirement-eligible in the next five years. Her strategy aims to attract and retain top talent and increase the diversity of the public workforce to better reflect New York State, by:

• Holding Civil Service exams on an ongoing basis to give candidates more opportunities to take tests;
• Establishing strategically located Centers for Careers in Government across New York State at select NYSDOL Career Centers where on-site civil service specialists will serve as direct liaisons between the Department of Civil Service, New York State agencies, regional educational institutions, community-based organizations, and jobseekers;
• Modernizing the Civil Service pay structure to provide more competitive wages so the State can recruit top-tier talent;
• Modernizing State office buildings to better facilitate telecommuting and hybrid work models;
• Expanding paid parental leave for New York State employees
• Launching a Public Service Matters campaign to promote career opportunities with New York State; and · Establishing a new award round for the Nurses for our Future scholarship program. This second round of funding will encourage recipients to work in a nursing position with a state agency after graduation to attract the next generation of nurses to rewarding careers in state government.