Albany Democrats are determined to push through a 17 percent hike in New York state’s minimum wage, despite repeated warnings that it would hurt the economy — especially small-business owners.
Coincidentally, both The Post and The New York Times ran stories yesterday in which several local owners said any hike might well put their businesses in jeopardy.
Even the one restaurant owner who supported the hike conceded that it would raise her costs significantly and force her either to raise prices or lay off workers.
There’s one thing they all agreed on, though — raising the minimum wage will cost jobs, not create them.
Erica Phillips, owner of the Velvet Peach Cafe in Brooklyn, said raising the minimum wage would force her to lay off three employees — one-third of her staff — and freeze new hires for the foreseeable future.
The increased cost might also force her to serve smaller portions — which will hurt business as well.
Henry Meer, owner of City Hall restaurant in lower Manhattan, said he, too, would have to freeze hiring — and cut his remaining workers’ hours.
And Charles Cestaro, who owns a cleaning business in The Bronx, noted that he still charges the same price he did 15 years ago — but his profit margin has dropped from 15 percent to just 9 percent.
Because any wage hike doesn’t just increase a business’ payroll — it also adds to what employers must pay in Social Security taxes and workers’ compensation costs.
And any hike in the minimum wage will impact a lot more people: According to the Bureau of Labor Statistics, the 6,000 New Yorkers earning minimum wage in 2008 ballooned up to 91,000 last year.
Cestaro also noted that he provides hundreds of needed jobs for unskilled workers — but if the minimum wage keeps rising, it will make more sense to hire skilled employees.
“What’s going to happen to those people who don’t have a skill set?” he asked.
It’s a good question.
Which is why Erica Phillips, the Brooklyn cafe owner, says that “Albany legislators are playing with fire.”
That the bill will soar through the Democratic Assembly goes without saying.
Whether it has similar luck in the GOP-controlled Senate depends largely on one person: Gov. Cuomo. He hasn’t taken a public position yet, though he says he favors the basic idea of a minimum-wage hike.
But doing so would only throw a huge roadblock in the path of New York’s economic recovery.
Because a low-paying job is still better than no job at all.