Business Council opposes $15 minimum wage

The Business Council of Westchester is urging state lawmakers to reject a proposed minimum wage hike, based on responses to a survey of its members.

“However well-intended,” council president Marsha Gordon said in a press release, “the increase will damage New York”™s competitive position and encourage some businesses to leave the state or cease operations entirely.”

Gov. Andrew Cuomo has proposed raising the minimum wage to $15 from $9, to be phased in over three years in New York City and five years in the rest of the state. The governor and legislative leaders have been negotiating the issue for the new state budget that begins April 1.

The Democrat-controlled Assembly supports an increase. The Republican-led Senate did not include an increase in its budget proposal.

Survey respondents opposed raising the minimum wage by a two-to-one margin, 61 percent to 30 percent. Nine percent were neutral.

Many of the respondents think a minimum wage increase would hurt their businesses: 15 percent said they would have to close and 46 percent would consider curtailing expansion plans.

The businesses that tend to expect the possibility of closing tend to be smaller enterprises, according to Geoff Thompson, spokesman for the business council. Smaller businesses often operate on tight profit margins, so increased costs have a greater impact.

Respondents also envision a big hit on jobs. More than one-third said they would probably lay off employees, 91 percent expect to hire fewer seasonal and part-time employees, 97 percent would decrease the number of youths they hire from workplace development programs.

Nearly half of the respondents expect a minimum wage increase to drive up wages for employees who already make the minimum. To make up for higher wages, 42 percent said they would probably reduce employee benefits.

“The downsides to the increase far outweigh any gains,” John Ravitz, executive vice president of the business council said in a press release. A higher minimum wage “could have unintended negative impacts on the low wage earners that it is intended to help.”

New York increased the minimum wage to $9 at the end of 2015, from $7.25 in 2013. Respondents said that increase had little or no impact on their businesses, but they expect an additional increase to cause problems.

Proponents of a $15 minimum wage have framed the issue from the point-of-view of workers. They point out that wages have not kept pace with inflation. At $9 per hour, or $18,720 a year for a full-time employee, a single parent with two children earns less than the official poverty line. Advocates cite economic studies that show that higher wages make workers more productive and that workers plow their extra earnings back into the economy as they buy basic products and services they couldn”™t afford before.

The survey was designed and analyzed by DataKey Consulting of Mount Kisco. About 1,000 businesses and nonprofit organizations were contacted, over a three week period in February, and just under 200 responded. Businesses and organizations that answered the survey represent 30 industries and employ from ten to 100 or more workers.