The state budget passed in May included a proposal to raise the minimum wage yearly starting in 2027 to keep up with inflation.
Image portraying inflation rate (Source: SHRM)
Companies on how are they Going to Handle Minimum Wage Increase
From an article published by Mid Hudson, the state’s minimum wage is slated for another hike on January 1, 2024, and while these adjustments will benefit workers at the bottom of the income spectrum, some firms are concerned about their capacity to handle increased payroll costs.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) in the Northeast will be used to index the minimum wage. This implies that if inflation increases, the minimum wage will also increase. Supporters claim that the purpose of the initiative is to give employees more security. Not just New York, but also 18 other states and Washington, D.C., have decided to index the minimum wage to inflation, with similar measures currently in place.
Although indexing looks to be popular, employers have differing opinions. Some people have expressed concern about the possible effects on their companies, particularly small firms that may not have the financial resources to deal with rising labor costs. Some organizations might think about automating more tasks, cutting back on staff, or boosting prices to manage these changes. However, proponents of the policy think it will result in a more stable workforce and boost the local economy as workers spend their increased wages there.
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