It’s old news that there is a proposal in front of New York state to push the minimum wage from $7.25 an hour to $8.50, which is an approximately 17-percent increase.
For workers earning minimum, this is music to their ears.
But for business owners, this could spell disaster to their bottom line.
On April 24, the New York State Assembly’s Standing Committee on Labor held a public hearing at the Common Council Chambers in City Hall which began at 1 p.m. and was chaired by Assemblyman Keith L. T. Wright, of the 70th District in Harlem.
It featured a full line of speakers: minimum wage workers, community activists, business activists and religious figures. Some told stories of trying to make life work with a family while being close to or making the minimum wage; others business leaders who feel such a great increase will have a negative effect on companies and the economy as a whole.
Supporters
Jerry Dennis, president of SEIU Local 200 United, was among the first few to give his opinion to Wright and Assemblymen Sam Roberts and William Magnarelli. As president of a union, he said he is fully in support of raising the wage, and gave quite a few examples why.
For one, he described Syracuse as a city that struggles everyday because of increasing poverty. He cited layoffs in the school systems, as well as public sector layoffs, as proof to back his statement. Employers, he said, take advantage of workers. A full-time worker making minimum wage isn’t above the poverty level of $22,350, the federal definition of poverty. A minimum wage worker at 40 hours a week comes out to $15,080, a significant amount less than what the government describes as poverty.
“The perception is that it’s all college kids or casual employees working these jobs,” Dennis said. “That’s not the case. Most of these workers are hard workers who are providing for their famlies.”
According to federal stastics, New York had a poverty level of 14.9 percent in 2010. Dennis applauded the Assembly’s effort to try to end poverty, but said hikes aren’t the “end-all.”
“We still won’t be where we need to be,” he said.
Denise Elijah, a Local 200 member and director of a bus company, sat next to Dennis, and spoke on her experiences. Elijah said she makes $12 an hour, which is too much for her to qualify for social services. She has children, and says she doesn’t earn enough to provide a quality living environment for them.
Wright gave a heartfelt response, saying $8.50 isn’t enough. He said the living wage in Central New York, without health insurance benefits, is about $13. Elijah shot back saying if the minimum wage increases, it’ll hopefully push her wage up a bit.
Walter Dixie of the National Action Network summed up his feelings in his first sentence.
“I have to saw New York deserves a raise,” he said. “No full-time worker should have to worry about what bills to have to pay. [The minimum wage] is not enough – rent, food, maintain a car. Just imagine trying to support a family on it, on $290 per week.”
He said it’s high time for a raise, and that if the wage rose with the rate of inflation since the 1960s, it would be $11 per hour today. In 1938, the Fair Labor Standards Act was enacted by Congress, which brought about the first minimum wage. It was supposed to ensure that low-wage workers earn enough to buy the bare necessities of life. It’s been proven that since its inception, the minimum wage hasn’t kept pace with inflation.
The United States Bureau of Labor Statistics said the value of the minimum wage peaked in 1968 at $1.50. If that wage had ben indexed to inflation, that number would be $10 today.
He also argued the extra money in workers’ pockets will be spent in the local economy, providing two-fold goodness.
“It’s anti-American not to raise it and support our workers,” he said. “You’re not protecting … the worker.”
Mozart Guerrier is a local community activist, social worker and writer. His main job is to work with the poor, going into their homes and evaluating the situation. He told a story of a low-wage worker who lived on the city’s west side and had to walk all the way to Camillus for his job, and he still coldn’t make ends meet.
“He was in sub-standard housing, and having to go through so much just to make it,” Guerrier said.
Rebecca Fuentes is a 13-year resident of Syracuse who has four children and a part-time job at a local mall as a cashier, making minimum wage. She said she receives some government assistance, but she “would rather get by on her own.” She did say, though, that the proposed increase would make her life a lot easier.
East Syracuse Mayor Danny Liedka said he doesn’t have a problem with a small increase, just not to the level that’s been proposed.
He mentioned the broad-brush approach, comparing New York City to Syracuse.
“It doesn’t work,” he said. “It’s different here than New York as a living wage. A little growth is never a bad thing, but that’s a big jump.”
Detractors
It seems as though the people who truly want the wage increase are the workers. Local business owners that spoke with The Eagle gave a resounding no to the question: should the minimum wage be increased to $8.50?
At the public forum, there were plenty of people in attendance who were there to speak against the raise. Unshackle Upstate is a non-partisan, pro-taxpayer, pro-economic growth, education and advocacy coalition of upstate businesses and trade organizations. Brian Sampson, executive director, had a written presentation all set and gave out copies of the transcription. Unshackle is openly opposed to the wage hike, stating that if New York passes the bill, it will have the third highest minimum wage in the country, and says it will put the state at a competitive disadvantage with neighboring states.
“When considering the cost of doing business, employers will look to create jobs there instead of New York,” Sampson said.
If the wage goes into effect, a full-time employee will earn $2,600 more in wages plus $308 in payroll taxes. Unshackle says that a place with 10 full-time employees earning the minimum will see nearly $30,000 increase in costs in one year. To make up for that money, companies will have to either raise prices, reduce employee benefits or even cut jobs.
“If New York moves ahead with a minimum wage increase, you can expect more job loss,” he said. “And history shows job loss will be felt most by our low-skilled workers and our youth.”
CenterState CEO conducted a survey in February on what effects would be felt with an increase. The percentage of businesses who said the cost of doing business would increase because of it was 43, while 28 said no. Nearly 67 percent of respondents said they oppose the increase, with 25 in favor. About 58 percent said hiring practices would not change, while 71 percent said they will experience some level of increased cost overall.
“We think the clearest voice on all this comes from our members,” said Deb Warner, vice president of public policy and government relations for CenterState. “It’s an accurate reflection on what we’re feeling.
She added that 60 percent of members would have to adjust compensation for other workers who are not currently earning minimum wage.
Wayne Cunningham, 67, is owner of the Village Deli in East Syracuse, and also president of the East Syracuse Chamber of Commerce, and has been a member since 1986. He was very opposed to an increase, especially since he owns a small business which employs up to 16 people at peak season, all of whom are part-time workers, though some get full-time hours. Attached to the deli is an ice cream stand that’s only open during the warm months.
The employees generally start at minimum wage and Cunningham gives raises as he sees fit.
“We used to be open seven days a week until 9 p.m., rain or snow,” he said. “We never closed early. Now we’re open less – we close on the weekends in winter – and now we’re only open until 7 p.m. That’s with it at $7.25. If it goes up to $8.50, I won’t be able to afford it.
“I’ll either have to layoff people or raise my prices significantly.”
Cunningham went on to say the current minimum wage is fine, assuming people make the right choices. He said he’s seen employees complain about not being able to survive, yet they smoke, drink and purchase tattoos.
“That’s not my problem if you are going to spend your money that way,” he said.
He added that there’s plenty of government assistance available to those who don’t make a lot of dough.
Senator John DeFrancisco spent time on the phone with The Eagle last week to discuss the issue. His stance is that he’s opposed to the wage hike.
“We’re in a time of economic slowdown,” he said. “It’s difficult to keep employment right now, so it’s logical workers would want an increase.”
He said that one of two things will happen: For companies to make payroll, they will cut jobs, or hire less people.
“The timing is very bad,” he said. He added that young people will be very affected. “College and high school students won’t be able to get those jobs they used to get because employers can’t pay.”
He pointed to the Earned Income Tax Credit as a way for low-income workers to find some money. Low-income workers in the state receive a significant annual wage supplement through the credit, and it’s available to tax filers. Basically, if you are a low-income worker, the government will cut you a check to help you out.
“In New York, low-wage workers are entitled to this,” he said. “If you make below a certain amount, you automatically qualify.”
Future
The bill still has a long way to go before it gets passed, so there is time. If you want your opinion heard, you are encouraged to write to your state representative so he or she can gather feedback.
On May 11, there will be another public hearing in Buffalo at the Common Council Chambers, beginning at 1 p.m.
Neil Benjamin Jr. can be reached at [email protected].
