$15 Minimum Wage? Not If Local Businesses Have Anything To Say

When New York State’s 2016-2017 budget is passed (potentially later this week), the question of whether or not a $15 minimum wage will be a contentious component. Governor Andrew Cuomo recently called the wage hike—and another proposal to provide paid family leave to workers—“fundamentally economic issues” that should be included in the 2016-2017 budget.

“I want to sign the best budget I can and I think the best budget has $15 in it and paid family leave and I don’t understand why it wouldn’t be in it,” Cuomo said.

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But his call for achieving a $15 minimum wage statewide by 2021 has many detractors in the business community, both throughout the state and here in Westchester.

A new survey conducted by the Business Council of Westchester (BCW) shows that nearly two thirds of members surveyed oppose the increase with significant numbers stating that the increase would result in reduced hiring, curtailed expansion plans, and possible layoffs. (The survey, conducted over a period of three weeks in February by Mount Kisco-based DataKey Consulting, was aimed at chief executive officers and senior executives of BCW businesses and organizations.) 

In announcing the results of the survey last week, BCW called on the members of Westchester’s State Legislative delegation to reject the increase. “While some of our members expressed support for the increase, the results and particularly the comments offered by many of those responding demonstrated that, however well-intended, the increase will damage New York’s competitive position and encourage some businesses to leave the state or cease operations entirely,” BCW President and Chief Executive Officer Marsha Gordon said. “Obviously that is not acceptable and the legislature should not enact the increase. We are sharing the survey findings with our Westchester state legislative delegation so that the members can understand the concerns of businesses and non-profits in their districts.”

“Rather than having a knee-jerk reaction to the proposed increase, we asked our members to examine the consequences to their businesses including payroll taxes, benefits, overtime, and hiring of seasonal employees and Workforce Development youth,” adds John Ravitz, BCW’s executive vice president and chief operating officer “The results clearly demonstrate that the downsides to the increase far outweigh any gains and, in fact, could have unintended negative impacts on the low wage earners that it is intended to help.”

Among the key conclusions of those who expressed opposition to the $15 wage:

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• 97 percent said it would decrease their hiring from youth workforce development programs.
• 91 percent would likely or definitely hire fewer employees.
• 47 percent said it would somewhat or significantly drive up wages for other employees.
• 46 percent would likely or definitely curtail expansion plans.
• 42 percent would likely or definitely reduce employee benefits to make up for the increase.
• 37 percent said it would likely or definitely cause layoffs.
• 15 percent said they would need to close their businesses.

Here’s what BCW members had to say on the survey:

• “I believe it could have a very negative effect on many small businesses and non-profits. Our organization has many young employees (students) who work part-time. In most cases they are not supporting families, rent, or mortgages. It is not practical to pay a 16 or 17 year old $15 an hour for their first job.”
• “My employees would not end up making more money because if they kept their job their hours would be reduced, therefore netting the same amount or not being employed by us.”
• “I think the compression issue alone would be daunting as our long-tenured employees would resent entry-level employees coming in at a rate that is so high.”
• “Increased wages won’t magically increase productivity.”

What are your thoughts on the $15 wage hike and how it would impact Westchester workers and employers? Let us know. Comment here, or email us at editorial@westchestermagazine.com.

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