Rochester Democrat & Chronicle: Minimum wage increase may stymie small business

By Matthew Steecker
Rochester Democrat & Chronicle, Feb. 16, 2017

... The minimum wage is currently set at $9.70 in Upstate New York. In New York City, minimum wage is currently at $11 for employees of businesses with 11 or more employees and $10.50 for businesses with 10 or less employees. The minimum wage for workers in Nassau, Suffolk and Westchester counties is $10. The minimum wage will reach $15 at the end of 2018 for employees of New York City businesses with 11 or more employees, the end of 2019 for employees of New York City businesses with 10 or less employees, and the end of 2021 [for] workers in Nassau, Suffolk and Westchester counties respectively. The minimum wage in the rest of the state will increase by 70 cents each year until the wage reaches $12.50 on Dec. 31, 2020, at which point the Director of the Division of Budget, in consultation with the Department of Labor, will create a new schedule for raising the minimum wage to $15. ...

There is a split among small businesses, with some owners saying the higher minimums are a long time in coming, finally recognizing disparities in wages. ...

Several advocacy organizations believe increasing the minimum wage makes good business sense.

“Workers are also customers and they can turn right around and spend by buying goods and paying for services,” said Holly Sklar, CEO of Business for a Fair Minimum Wage.

Sklar says increasing the minimum wage reduces product waste and increases cost savings.

“There is less turnover. Businesses with low-paid employees have a high turnover rate,” Sklar said. “There is cost savings on hiring and training to replace workers.”

Sklar also believes having a higher pay model benefiting all specifically applies to small and local business.

“Small and local businesses are more dependent on a local customer base,” Sklar said. “Increasing the minimum wage would allow customers in their area to spend more at the store. It would add to the strength of the local economy the business is based in.”

The morale and efficiency of employees also would be boosted, Sklar said. This makes all the difference in the world in today’s business environment in which brick-and-mortar is competing with online.

“Employees are more productive, which would improve customer service,” Sklar said. “Consumers have a choice: go to a business or go online. One way businesses have to differentiate is by giving a better experience through customer service. Businesses on a low-wage model have high turnover and find themselves in a no-win situation. People will go anywhere for a better deal, especially today. They will go online.”

Matthew Steecker is Southern Tier regional business reporter for the USA TODAY Network.

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