The minimum wage for New York City more than doubled between 2013 and 2020, as a result of State legislation, but its purchasing power has been eroded by the high rate of inflation in the wake of the COVID-19 pandemic. Two different legislative proposals in Albany aim to address the issue.

• As part of the FY24 Executive Budget (Education, Labor and Family Assistance (ELFA) bill Part S), Governor Hochul proposes that the current minimum wage levels be indexed to inflation, starting in 2024, subject to a 3% cap and off-ramps, depending on economic conditions.
• The Raise Up NY proposal (S3062D/A7503C) would first increase the minimum wage between 2024 and 2026, to adjust for the purchasing power decline of recent years, and then index it to inflation plus nonfarm business labor productivity growth starting in 2027. (This is the same indexation currently being used by NYS Division of Budget to increase the minimum wage in upstate NY until it reaches $15).

The proposals are part of a broader trend: the minimum wage is indexed or set to be indexed to inflation in 18 states and Washington D.C. With a few exceptions, indexing is based on the Consumer Price Index for all urban consumers (CPI-U) or for urban wage earners and clerical workers (CPI-W) but reference geographies and time periods vary. Many cities also index their minimum wage. Seattle’s minimum is now $18.69 for most employers and San Francisco’s is $16.99. Washington D.C. will raise the minimum from $16.50 to $17 in...

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