ITHACA, NY – At last week’s Tompkins Economic Summit, Tompkins County Chamber of Commerce president Jennifer Tavares addressed concerns over pushes on both the county and state level to move toward a living wage as minimum wage.
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While it has drawn a great deal of support, the idea of a minimum wage hike has not been met with universal approval. A November poll of Ithaca Voice readers showed that 58 percent favored the idea, while 38 percent were opposed and four percent were unsure.
For most, the biggest concern about the potential minimum wage increase is the impact that it would have on small businesses.
During a December Common Council meeting that saw almost unanimous public support for the wage increase, Tavares voiced these concerns. She spoke about a survey the Tompkins Chamber of Commerce had been conducting ammong local business owners that showed that 60 percent of them were “extremely concerned” about the minimum wage increase.
During her presentation at the Tompkins Economic Summit, Tavares revealed the results of the survey in detail.
Tavares noted that a number of businesses surveyed already paid their workers $15 or more at minimum, and were not concerned about the increase.
“I think the more employers we have that are paying $15 or more, that are supportive of what they feel is a living wage for their employees, that’s something we all want and can get behind,” Tavares said. “The issue is that every business is different. Every small business is different, every large business is different. Job markets are drastically different depending on the what the type of work is, what the workplace is.”
Results showed that out of 176 business owners surveyed, 23 were in favor of a $15 minimum wage by 2021, 126 were opposed and 27 were unsure.
The survey also asked businesses owners if they had calculated the direct impact of a wage increase. Tavares said that 50 percent of those surveyed at actually run the numbers in their upcoming budgets.
While the largest number of respondents said there would be no impact or less than $10,000 annually, a substantial portion of respondents said the impact would be over $51,000 a year. Some businesses estimated the impact at over $500,000. (Exact figures were not provided).
The survey also asked business owners about the impacts of wage compression, with similar results:
Tavares read a few specific quotes from respondents, with one business owners saying: “We’re not really sure [how much it will directly impact us], but we’ll close our store if minimum wage goes to $15 an hour. It’s not worth owning a small business in such a highly regulated environment.”
Other respondents said they would have to cut hours and/or raise prices to remain profitable after the change. Another said that they would no longer be able to risk hiring young or inexperienced workers if the change went through.
Tavares highlighted the last point, saying that a minimum wage raise was at odds with the broader goal of expanding the skilled workforce, since the on-the-job training becomes a less appealing option when the minimum wage is high.
She went on to note that people sometimes lose sight of the fact that a payroll increase means that businesses have to increase revenues by more than the amount needed to just cover payroll.
“It’s the payroll, it’s payroll taxes, it’s the increased overhead, it’s the potential of, ‘How do I increase sales that much without increasing my staff? How do I add more people, how do I find more employees, or do I just dump that much more work on everyone who’s already here?,’” Tavares said.
Finally, Tavares noted that recently, New York Governor Andrew Cuomo said he would consider exempting farmers from paying their employees the new minimum wage. Tavares questioned if local businesses were really all that different from farmers.
“Why are we now going to pick out and say, ‘Okay, we’ll exempt the farms from this wage increase and we’ll just make everyone else pay it?,” she asked, adding that business owners need to be more active in speaking out if they want their concerns to be heard.
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