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Economic Impacts of the Port Authority of New York and New Jersey Minimum Wage Proposal

June 18, 2018 / By Patrick Burns, Halil Toros and Daniel Flaming
Underwriter: Service Employees International Union Local 32BJ
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Overview

The minimum wage increase proposed by the Port Authority of New York and New Jersey will transform the lives of almost 40,000 workers at John F. Kennedy, Newark Liberty, and LaGuardia airports. The wage floor for workers providing ticketing, baggage handling, security, airplane and building cleaning, restaurant, retail, and on-plane catering services will rise to $19 an hour by 2023.

There will be an economic stimulus in the communities where workers live. Their increased household spending will increase economic output by over $465 million in 2023 and every year thereafter, creating 2,700 new jobs.

The PANYNJ has long prided itself on being the region’s economic “engine of growth.” Passengers, cargo, airlines, and flights depend upon these three PANYNJ public air transportation infrastructure hubs, which supported 1.1 million domestic and international flights for all carriers in 2017. Outbound flights transported just under 64 million domestic and international passengers, representing 8 percent of the national total. The three big PANYNJ airports also transported just over 3 million tons of cargo.

The three airports and their workers serve the New York-Newark-Jersey City metro area – the nation’s largest. This region is home to 20.3 million people – 1 in 16 Americans. They also serve a diverse economic region of over 576,000 business establishments and 8.2 million worker, with a combined annual payroll of $573 billion.

Workers Who Will Benefit

Nearly 46,000 workers out of a total of nearly 69,000 workers at the three airports are covered by the ordinance. Almost 40,000 of these workers earn less than $19 an hour and will directly benefit from the increased minimum wage.  Currently, workers in covered services average $13.26/hr. across all 3 airports. Airplane Cabin Cleaning workers have the lowest average wages, at $12.08/hr.; they average $11.02/hr. at Newark Liberty Airport, due to New Jersey’s lower statewide minimum wage.  On these current earnings…

  • 85% of covered airport workers are supporting families, and half support children who live with them;
  • 22% of these airport workers in covered services live under double the poverty threshold;
  • 46% are rent burdened – paying 30 percent or more of their income for housing, and 21% are “severely rent burdened,” paying over half of their income for housing.
  • Household overcrowding – not being able to afford enough bedrooms to provide normal privacy and adequate living space – is experienced by 13% of covered service workers.

The aggregate raises earned by covered airport workers under year 1 of the Port Authority’s proposal will add up to $57 Million.   By 2023, their cumulative raises from the $19 an hour minimum will add up $431.6 million in increased annual earnings. The largest affected occupation will be In-Terminal Passenger and Baggage Services workers who are baggage handlers, skycaps, wheelchair agents, ticket and ID checkers, and shuttle bus drivers. Thousands of Airplane Cabin Cleaning, Terminal Concession Services, and Building Maintenance Service Workers will also be affected.

Economic Impacts

Higher wages for covered service workers will also create positive impacts in the local communities where they live. The increased annual spending resulting from workers’ wage increases will support over 2,700 added non-airport jobs in the regional economy. Sales to local businesses will grow by $465.1 million.

Federal tax revenue will also rise with these added sales, generating over $43.7 million more a year for public services. State and local tax revenue will increase by $33.7 million a year.

Workers who make slightly more than the new proposed minimum wage level are also likely to receive wage increases. This includes supervisors of affected workers and other workers in higher-paid occupations. This ripple effect is estimated to benefit an additional 20 percent of workers, which means that total economic impacts are likely to be one-fifth larger than the estimates shown in this report.

Geography of Economic Impacts

Economic impacts of the Port Authority’s minimum wage increase will occur near affected workers’ homes. The City of New York – especially the boroughs of Queens, Brooklyn and the Bronx, as well as Newark, Elizabeth and Irvington, New Jersey, will see some of the largest impacts. The communities where they will spend their increased earnings start in the shadows of each airport but are far ranging.

PRESS COVERAGE AND ARTICLES

How long do Newark Airport workers have to wait for a fair wage?
Editorial, New Jersey Star-Ledger (July 2, 2018)

Vote on airport wages pushed back by Port Authority, will vote on $19 per hour minimum wage by September
by Michael Gannon, Queens Chronicle (June 28, 2018)

Opinion: It’s high time we raise wages for airport workers
By Gertrudis Lopez, The New Jersey Record (June 26, 2018)

Raising airport worker wages will help NY and NJ (Op-Ed)
By Patrick Burns, New York Daily News (June 26, 2018)

Historic Gains For New York and New Jersey Airport Workers
by SEIU Local 32BJ (June 22, 2018)

Good Airport Jobs: Twitter feed and video interviews with covered airport workers
by SEIU Local 32BJ (Spring 2018)

New York-Area Airport Workers on Way to $19 Per Hour
By Patrick McGeehan, New York Times (March 22, 2018)

Port Authority Board Approves Proposed Minimum Wage Increase for Thousands of Airport Workers
by The Port Authority of New York and New Jersey, Press Release (March 22, 2018)

Union Calls On Port Authority to Bridge Gap in Airport Workers’ Salaries
By Patrick McGeehan, New York Times, (November 16, 2017)

De Blasio takes airport workers’ pay raise, union representation fight to U.S. Conference of Mayors in Miami
By Ginger Adams Otis, New York Daily News (June 22, 2017)

Area of Work: Economy
Tags: Airport Workers, Bronx, Brooklyn, Economic Impacts, Economic Ripple Effects, Economy, Employment, Income, JFK, Labor Market, LaGuardia, Minimum Wage, New Jersey, New York, Newark, Newark Liberty, PANYNJ, Port Authority, Poverty, Queens, Wages, Work