February 20, 2013

In My Opinion: Business owner opposes wage hike


---- — I have owned one or more small businesses in Clinton County since 1990.

I have never experienced a more challenging time operating my business than with our current fragile economy. Every day is a struggle just to keep my doors open, and many fellow small-business owners agree.

To survive, I have reduced my expenses to their bare minimum, lowered my prices, increased the hours I work in the store and expanded my product selection and services.

If the minimum raise is increased by the proposed 17 percent, from $7.25 to $8.50 per hour, I will be forced to work more hours — unfortunately, taking those hours away from my dedicated and hard-working long-time employees.

These employees are all making more than minimum wage, based on their quality of work and length of employment. A minimum-wage increase will put all of them back at the same minimum wage as I cannot afford to increase each of their wages 17 percent above what they now earn.

I will need to raise my prices, which will drive customers away. It may even be the last straw that will force me to close my doors for good.

This happened in 2006 with New York state’s last minimum-wage increase. I had to close my store in Morrisonville due to that increase in labor costs. I’m not a large corporation with the benefit of tax loopholes and subsidies or the government who can just run up a deficit — “Bill me later!” — I pay my bills each month.

Many economists agree that raising the minimum wage is a political short-sighted act that does nothing to reduce poverty.

Proponents state that raising the minimum wage will be advantageous to low-income workers. A recent compelling study, “The Effects of Minimum Wage Increases in New York State: Evidence From A Natural Experiment,” proves this to be untrue. The study was authored by professors at San Diego State University, Cornell University and the University of Oregon and, using data from New York state, it examined the impact of the state’s minimum-wage increases that occurred from 2004 to 2006.

According to the study, this increase, from $5.15 to $6.75 an hour, resulted in a 12.2 percent drop in employment of younger, less-educated people, particularly those between the ages of 16 and 29.

The study goes on to project that the proposed 17 percent raise of the minimum wage would result in a loss of 28,990 jobs.

Some minimum wage jobs aren’t worth $8.50 an hour. I am not saying minimum-wage workers are not valuable as human beings; I am saying that simply because they are being paid $8.50 per hour does not mean an employer will get enough value from that employee for their work to be profitable.

Take, for example, a high-school student who works in the summer scooping ice cream for the season. How much do we want to pay for that ice-cream cone?

I hope our politicians rise above this proposed “quick fix” solution to New York state’s troubled labor market.

Instead, help our low-income employees by giving them better health-care choices, education opportunities and Earned Income Tax Credits, especially for those with children, so that all taxpayers share the burden, not just small-business owners.

Becky Leonard is owner of Under One Roof Movie Store in Plattsburgh and a long-time local small-business owner.