Small businesses in New York are facing mounting pressure to comply with the state’s escalating minimum wage. Nearly every facet of the economy has felt the bruising impact of artificially raising the rates that have left already overtaxed business owners out to dry. Making matters worse, the full impact of the law has not even occurred yet, with wage increases on the books scheduled through 2021.
The food service industry is a prime example of the damage these incessant minimum-wage increases can have on both workers and employers. The latest increase has some New York City businesses paying $15 an hour — with Long Island, Westchester, and the rest of the state not far behind.
The verdict is in; the wage hikes are leading to layoffs, price increase,s and service cutbacks. Not only do the restaurant owners have to raise prices to keep up with the law, they are also paying more for their goods and ingredients as farms and manufacturers struggle with the same dilemma. It’s a vicious cycle borne from a misguided sentiment that fails miserably in practice.
One of the greatest sins in policymaking is forgetting laws don’t exist in a vacuum. Financially strong small businesses, with a robust workforce, adequate service, and solid bottom line are good for everyone. Increasing the minimum wage for a worker, whose hours are cut back as a result, or worse, eliminated entirely, serves no one. This is the definition of reckless, misguided policy designed as respite.
There is a better way to lift everyone
The Assembly Minority Conference has advocated for a number of solutions to aid struggling lower-class employees. Among the proposals is a boost in the earned income tax credit (A.4177, Kolb), which has remained stagnant even as the minimum wage has continued to grow. We have also advocated for the implementation of a training wage (A.988, Kolb), set below the minimum wage, which would allow less-experienced employees to gain needed work skills without crippling businesses in the process.
Along those lines, the Learning for Work Program (A.4255, Ra) would combine academic work with on-the-job training, paired with a tax incentive for participating businesses. This would give workers the skills necessary to earn higher wages over their career and help struggling business owners by providing a tax break.
The New York Legislature can right these wrongs by reversing course, stunting the minimum-wage hikes, and instituting common-sense policies that achieve the same goals without harming the backbone of New York’s economy along the way. Using a sledgehammer to crack a nut usually does more harm than good. This is one such case.
Brian M. Kolb (R,I,C–Canandaigua), a former small-business owner, is the New York Assembly Minority Leader and represents the 131st Assembly District, which encompasses all of Ontario County and parts of Seneca County. Contact him at firstname.lastname@example.org