New York Gov. Andrew Cuomo announced plans to submit a proposal for a minimum wage increase on Sunday, Jan. 18. He aims to raise New York City's minimum wage to $11.50 an hour and $10.50 an hour for the rest of the state by 2016.

The current minimum wage in New York is $8.75 per hour and is scheduled to increase to $9 in Dec. 31; the federal minimum wage is $7.25. President Obama plans to raise the federal minimum wage to $10.10.

Prior to this announcement, Cuomo had rejected the idea of a wage increase.  Last February, he said having different wages throughout the state would create chaos and would only establish competition between communities.

According to The New York Observer, Cuomo changed his tune after seeking the endorsement of the Working Families Party during his re-election campaign.

Bill Lipton, the party's state director, thinks the governor should go further.

"We applaud Gov. Cuomo's proposed increase in the state minimum wage as an important first step in the right direction," Lipton said in a statement. "But $11.50 is almost $2 less than what he endorsed last spring. And the truth is it's nearly impossible to raise a family in this state on even $12 or $13 an hour."

Cuomo had made campaign promises to increase the state's minimum wage to $10.10 and the city's wage up to 30 percent higher at $13.13 an hour. Cuomo says the increase in wage reflects the higher cost of living in New York City.

According to the Wall Street Journal, the proposal to increase minimum wage also includes initiatives to alleviate student loan debt and cut taxes for small businesses. The measures were part of an initiative to target income inequality and poverty.

The loan forgiveness plan ensures 100 percent coverage of student loan payments for the first two years after graduation for students who attended New York universities. The plan also covers students who live in the state after graduation, earn less than $50,000 a year and participate in federal income loan repayment program.

The tax cuts for small businesses would lower state income tax rates from 2.5% to 6.5%. Businesses considered are those with less than 100 employees and an income of less than $390,000.

Cuomo plans to unveil these measures in the state's budget proposal on Jan. 21.