Business

Small business owners upset about plan to raise minimum wage, claiming they can’t afford increased pay

ON THE SHELF: NY’s small-business owners are up in arms over the proposed $1.25 hike in the minimum wage, saying that revenues are not there to offset the raise. (Dennis Clark)

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Small-business owners from across the state are voicing their upset over a plan to raise the minimum wage.

The New York state Legislature is eyeing a measure to increase the minimum wage by $1.25, to $8.50, and also index it to inflation.

Assembly Speaker Sheldon Silver said raising the minimum wage is “a top priority” of this state Legislature session. A spokeswoman for the speaker said he is “optimistic” that the minimum-wage measure will pass this year.

But small-business owners are of another mind.

“You’re talking about a 17 percent to 18 percent increase in the wage of your minimum worker who isn’t even trained,” says Pat Orzano, who owns a 7-Eleven store in Massapequa.

Orzano emphasizes that she is speaking for her business and not for the 7-Eleven Corp.

She adds that raising pay for the newest worker, one who is often in his or her first job, would have an effect on other workers who have more experience.

“By doing that, those experienced workers in the $8-to-$9-an-hour bracket would suddenly feel, since they have put two or three years into the business, that now they’re at or near the minimum wage,” according to Orzano.

Orzano is a member of the National Federation of Independent Business (NFIB), which held a press conference for business owners to explain the economic impact of the measure on their business. The NFIB represents some 22,000 businesses in the tri-state area.

Critics of these complaints by small-business owners contend that the minimum wage has been raised several times previously and businesses were able to adjust. Still, business groups have been mobilizing to fight these higher costs.

“Everywhere minimum-wage laws have been debated, our members have told us unambiguously that they strongly opposed arbitrary increases in the mandatory minimum wage,” said Jack Mozloom, an NFIB spokesman. “They regard them as intrusive to their business and disruptive to the economy.”

Orzano says that raising the state minimum wage by 17 percent, given the recent economic conditions, would be a hardship for the average small business.

“None of us have had 17 percent increases in our sales. Retail sales have been flat. Our taxes are going up. They are astronomical,” she says.

The result, she predicts, would be a reduction in jobs; she said that she would have to cut worker hours for the third year in a row.

However, Kerri Biche, a spokeswoman for Silver, says the businesspeople are overlooking the good points of raising the minimum wage.

“The benefits of higher minimum wages will go to people who are living on the margins, people who are having trouble paying their rent and paying for food,” Biche says. She added that businesses can also benefit.

“These people getting the higher wage will be spending more money in their communities. They will be able to buy more from these businesses,” Biche says.

But an upstate business owner claims that it will destroy jobs.

“I find that when minimum wages go up, it becomes cost-effective to find other ways to pay for work,” says Clarence Price, the owner of a Binghamton Roto-Rooter business with six employees. “As an example, a few years ago, when the minimum wage went up, I had to stop using high school students to clean up.”

It became more cost-effective, he says, to replace the marginal workers with equipment because “it doesn’t require Social Security.”

“As a result,” Price says, “two kids lost their jobs, which I feel bad about.”