Business Groups Balk at Higher Minimum Wage Talk in New York

Published April 17, 2012

New York Assembly Speaker Sheldon Silver (D-Manhattan) is leading a move to raise the state’s minimum wage from $7.25 to $8.50 and then index it to annual inflation.

“Increasing the minimum wage would benefit over 1 million working New Yorkers. We should be leading the way on this front and living up to our reputation as a state that takes care of our own,” wrote Silver in an open letter on the Assembly’s Web site. “To help make this a reality, the Assembly Majority is fighting to increase New York State’s minimum wage.”

Business groups in New York oppose the move, which would amount to a 17 percent increase in the minimum.

‘A Stealth Tax’

“The Business Council believes that the way to improve our state’s economy and the lives of all New Yorkers is to create more private-sector jobs. Raising the minimum wage would only hurt New York’s small businesses, farms, and not-for-profits that are struggling to make their current payrolls, and [would] reduce job opportunities in this difficult economy,” said Heather Briccetti, president and CEO of the Business Council of New York State, Inc.

New York Farm Bureau President Dean Norton said, “When the government imposes costs on a business that the market does not dictate, we typically call this a tax. The proposal to increase New York’s minimum wage is a stealth tax for our state’s farmers masquerading as a benefit for workers.”

He said the proposal would hurt the very people that it aims to help, by artificially increasing payroll and forcing farmers to make tough decisions about the size of their workforce and the price of their products.

“At a time when we are working hard to create jobs and improve our business environment, this proposal seems particularly ill-timed and ill-considered,” Norton said.

‘Consumers Have to Pay More’

State Sen. Cathy Young (R-Olean) agrees with the business groups. Speaking recently at a local Chamber of Commerce-sponsored legislative breakfast, she said, “Anytime you raise [the] minimum wage, consumers have to pay more because businesses have to make that up. That’s the wrong direction to take.”

The Jamestown Post-Journal newspaper covered the event and reported Young said the proposed minimum wage increase would “drive business out of the state.”

William Dunkelberg, chief economist for the National Federation of Independent Business, said the increase would “relegate more youth to the street-corner economy, not just when it happens but forever, since the minimum wage sets the hurdle to be beaten every year from the time it is passed.

“This is not exactly a ‘pro-jobs’ policy for any state” Dunkelberg added, “and it has even worse long-term implications as those displaced by the higher minimum will not get the ‘on-the-job’ training that we all experienced and needed to develop into productive workers.”