Dear New Yorkers,
The new year got off to a strong start economically, with job growth far higher than expected nationally, and strong in New York City as well. If you’re surprised by this, because you keep hearing about expectations of a recession caused by the Fed raising interest rates, well, economists were surprised too.
Over the past year, the Fed has increased rates at the fastest clip in decades, from near zero to 4.5%, yet growth in many areas remains strong. Inflation measures have softened meaningfully from their peak, but are still well above the Fed’s comfort level – so continued interest-rate increases are expected. Most economists continue to project a mild recession for 2023, but there remains a lot of uncertainty about where things are headed.
The past year’s inflation has eroded purchasing power for many working families, as price increases outstripped wage gains. The minimum wage for New York City reached $15 per hour in 2019, but its purchasing power has declined to $13.38 in inflation-adjusted dollars – leaving many low-income families struggling to afford rising rents, food, child care, and energy costs.
That’s why the Governor and legislators in Albany are considering increases to New York’s minimum wage – including indexing it to inflation, as 18 other states and many cities now do (as a result of which the minimum wage is now $16.99 in San Francisco, $17.29 in Denver, and $18.69 in Seattle).
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