The Business Council opposes this bill which would increase the state minimum wage in three yearly increments from its current level of $7.15 per hour to $8.25 per hour on January 1, 2011, and then index the minimum wage to the consumer price index after that date.
We have a number of concerns regarding this proposal:
- A minimum wage increase is but one component of a business's overall employee costs. With an increase in the base wage rate, employer financed taxes rise in tandem, in particular Social Security and Medicare taxes.
- Small businesses will have the hardest time absorbing the proposed $1.10 increase in the minimum wage. Small business owners will not be able to offset the cost of the minimum wage increase leading to smaller profits. Small businesses would likely need to raise their prices in order to cover a portion of the proposed increases in the minimum wage. It is unlikely that the entire cost burden of an increase in the minimum wage can be recouped through an increase in prices.
- An uncertain economic climate is not the time to increase business costs. It is clear the state's economy is feeling the impact of increased costs for energy, food and health care. Businesses are not immune from these cost increases and competitiveness issues have often precluded businesses from passing these costs onto suppliers or consumers. While the bill seeks to increase the economic security of New Yorkers through a minimum wage increase which would permit them to “achieve a modest standard of living”, the proposed increase is likely to hurt the very individuals it is designed to help. A statutorily-mandated wage increase could force employers to limit future hiring or reduce employment overall. With many aspects of the state budget yet to be finalized, a minimum wage increase could force employers to limit or eliminate currently provided employee benefits.
For these reasons, The Business Council respectfully requests that the Assembly not enact this bill.