Tompkins Weekly

What does state-wide minimum wage increase mean for workers, businesses in Tompkins County?



By E.C. Barrett
Tompkins Weekly

The new year brought new minimum wage benchmarks for New York’s lowest paid workers.
The state minimum wage has increased from $9 per hour to $9.70 got most earners. For the first time in state history, however, the minimum wage is being separated by region and type of work, with higher increases for downstate workers – that includes an increase to $10.75 an hour for fast food workers statewide.

The increase in minimum wage is part of Gov. Andrew Cuomo’s commitment to raise the minimum wage to $15 an hour, with yearly increases at different rates across the state. Opponents of the increase cite the financial burden to businesses; proponents say the current minimum wage, even after the increase, keeps workers in poverty.
Jennifer Tavares, president of the Tompkins County Chamber of Commerce, conducted a survey at the end of last year asking local business owners their thoughts about the wage raise.
“About half the respondents had calculated wage increase impacts and wage compression impacts,” she said, “and some of them shared specific effects, including eliminating raises, reducing staff and hours, and price increases.”
Wage compression is the decrease in wage differences that happens when new workers are hired at a rate close to the wage of more experienced workers who have been with the employer longer. According to Tavares, it is one of the unintended consequences of increasing the minimum wage and results in even higher labor costs when veteran workers demand corresponding increases to their own pay.
She said that paying for higher labor costs means finding ways to increase revenue, which is not simply a matter of doing more business.
“It’s difficult for most businesses to increase their revenue without increasing their inventory and hiring more employees,” Tavares said. “I also don’t think those workers are going to spend their extra wages at places on the Commons or the Ithaca Bakery.
“So the assumption that money is going back on the street, I think it will happen to a certain extent,” she added, “but the money has to come from somewhere.”
One solution raised by wage increase proponents is capping the wage gap between the highest paid workers and the average employee. But it’s not a simple solution.
“Most small businesses and non-profits don’t have owners or managers with those kinds of take home profits,” Tavares said when asked if local business owners and nonprofit executives have considered decreasing their own pay to off-set rising labor costs. “About 70 percent of our members are small businesses. Even though it’s anecdotal, I can tell you the average small business owner isn’t making 10 times what they pay their employees.”

For Pete Meyers, coordinator of the Tompkins County Worker’s Center, the minimum wage increase doesn’t go far enough.
“We’re disappointed that the minimum wage is not going up to $15 upstate, so we’re continuing our campaign for a countywide living wage,” he said. “So many people think that minimum wage is for teenagers but the vast majority of minimum wage workers are not teenagers.”
Meyers said that focusing on the business part of the equation leaves out the reality of low wage work.
“People have to make ends meet, how are they supposed to do that?” he said. “With the sympathy I have for small businesses, we need to recognize that it’s unacceptable for people to be living in poverty in our society.”
For Meyers the wage debate is informed by the way we value different kinds of labor.
“I think the fact that we value a frontline worker in a service organization at so much less than people in leadership positions requires a societal conversation,” Meyers said.
“When we talk about increasing the minimum wage there’s a lot of resentment that fast food workers will be making $15 an hour,” Meyers said. “But our value is not dependent on what we’re making compared to other people, it’s not a shot against my self-esteem to say that someone else deserves to not have to live in poverty.”
For more information and resources, visit tompkinschamber.org and www.tcworkerscenter.org.

 

 

 

 

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