New York mayor Bill De Blasio and his administration estimated that the executive order would extend its coverage to 18,000 workers in the next five years. The current living wage of $10.30 will be raised to $11.50 an hour for those that receive benefits such as health insurance. Non-benefits earners would get an increase of $13.13 per hour as compared to the current $11.90 rate per hour.
De Blasio also intends to set the citywide minimum wage at the same amount. If successful, the matched rate of minimum wage to the living wage would mean that hourly workers could earn over $15 per hour by 2019.
When campaigning last year, De Blasio called against economic inequality that plagued New York, dubbed as the U.S.' most populous city.
"We cannot continue to allow rampant and growing income inequality," said De Blasio. "Every tool counts. If we reach 18,000 families with this tool and get them to a decent standard of living, that's a game-changer for those families."
The 18,000 workers that would be covered with the new executive order represent around 70 percent of the jobs that will get financial assistance from NY city's Economic Development Corporation.
The current living wage law of the city was passed in 2012 and applied to around 1,200 jobs.
New York Governor Andrew Cuomo supports the scheme to increase the state's minimum wage to $10.10 per hour compared to the current hourly rate of $8. Moreover, New York City and other areas will be allowed to set it at an increased rate of 30 percent.
If approved, the minimum wage can match the living wage.
Administration officials define the move as an extended measure of policies aimed at decreasing the huge gap between rich and poor. Some of the ways to achieve this is by expanding the paid sick leave and by building a more affordable housing plan.
The living wage law has been criticized for its limited reach. Companies that are most affected are those that directly receive city subsidies as opposed to those that are tenants in subsidized developments. Moreover, the law had specifically excluded coverage of the Hudson Yards development project found on the Far West Side.
In the executive order, De Blasio will eliminate the above-mentioned exemption for the development at Hudson Yards in the future. However, some areas will still be subjected to some restrictions. Businesses with sub $3 million in gross income and housing projects wherein more than 75 percent are made up of affordable housing units or manufacturers are not at all affected by the order.
