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Minimum wage: What does tying it to inflation mean for workers?

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  • Staff Report 

New York is set to raise its minimum wage next year, with an additional change that will tie future increases to inflation.

This decision is the outcome of a sustained push by advocates who campaigned for wages to be linked to the Consumer Price Index, a measure reflecting the average change in prices paid by urban consumers for various goods and services over time. As a result, New York’s minimum wage workers will see their earnings rise in line with the cost of living and inflation rates.

Governor Kathy Hochul and state legislators have succeeded in making this significant adjustment, which will primarily benefit nearly 900,000 minimum wage workers in New York, many of whom are women, people of color, or single mothers.

The minimum wage will increase by $1 to $16 in 2023 for New York City, Long Island, and Westchester, while the rest of the state will see a minimum wage of $15. This is to be followed by further 50-cent increases in 2025 and 2026.

From 2027, minimum wage adjustments will be tied to inflation.

Despite some disappointment that the new minimum wage falls short of the proposed $21 per hour, this development ensures that New York’s wage rate remains competitive while also eliminating the need for recurrent wage debates in Albany.