Cuomo's Abuse Of Authority

The governor on the wrong side of the Hudson is rightly in trouble for allowing his appointees at the Port Authority of New York and New Jersey to abuse their power in pursuit of political punishment. The governor on the other side of the river, though, deserves scrutiny for his recent actions at the Port Authority, acting arbitrarily and capriciously—for a good end, but the end doesn’t justify the means.

Andrew Cuomo acted in response to a Daily News series on low-wage poverty. An army of workers toils on Port Authority property for minimum wage or barely above it. These workers don’t work for the Port Authority but for airlines (or airline contractors) who do business on Authority property. Twenty-seven-year-old single mom Shareeka Elliott “scrub[s] floors and toilets at checkpoints and lug[s] monstrous bags of garbage” for little more than the new $8 state minimum, the paper reported. “Elliott hasn’t been able to provide for her two daughters” despite her hard physical labor. Some people work for below minimum wage, supposedly because they get tips from handicapped passengers they help.

In response, Cuomo helped Elliott and her colleagues overnight. Port Authority director Pat Foye “ordered an immediate pay hike for airport workers toiling in jobs at or near the minimum wage,” the News reported, to $9 an hour and, gradually, to $10.10.

Since the low-wage workers don’t work for the Port Authority, though, Foye couldn’t order this hike. Rather, he is persuading the airlines at JFK and LaGuardia to do it “voluntarily.”

Isn’t that good government at work? Cuomo showed he could improve lives in just minutes, helping people who deserve a raise. His actions, though, should give pause to people who are worried about poverty and inequality.

The governor (through Foye) confined his actions to the New York airports the Authority manages, leaving Newark, its third airport, alone.

But Port Authority executives act on behalf of both states. If it’s good policy to set a higher wage at two airports, it should be good policy for three— which Foye should feel comfortable mandating. Yes, Cuomo has been far more active on minimum-wage and anti-poverty issues than has Gov. Chris Christie, but the Port is supposed to be an Authority independent of both governors’ individual goals. Otherwise, over time similar moves could encourage the airlines to play one state off another—with an airline pledging to favor, say, Newark if New Jersey’s Port Authority appointees keep wages lower there.

Setting an artificially high minimum wage, without any warning or discussion, could also act as a deterrent for other private businesses that operate on government property, or are contemplating doing so.

This is not a question of whether heavily subsidized businesses should have to pay a higher wage. The airlines aren’t heavily subsidized. Yes, they benefit from tax-exempt bonds to build their terminals. But the profits the Port Authority makes from landing fees and other airport charges—half a billion dollars in profit, not just gross revenues, in 2012—helps subsidize its money-losing operations, including its bus terminal and mass transit.

Cuomo is forcing these private businesses, then, to pay artificially high wages not because they benefit from being on government property; they pay heavily for it. If I run a coffee shop in a private office tower built on government land—say, at the Port Authority’s new World Trade Center—or a gift shop in the MTA’s Grand Central Terminal, also indirectly controlled by Cuomo, his move should make me nervous.

To be sure, if private contractors are acting illegally—misclassifying workers as ineligible for the minimum wage for receiving tips—the government should enforce the law.

But the bigger questions are: Should the minimum wage be higher, or does the risk of losing jobs to automation outweigh the benefit of higher pay to people who keep their low-wage jobs? Should anyone work full-time and still not be able to support a family without government benefits such as food stamps? Cuomo’s unilateral move didn’t answer those questions—and it raised questions of its own.

Nicole Gelinas (@nicolegelinas on Twitter) is a contributing editor to the Manhattan Institute’s City Journal.