Workers' advocacy, support and empowerment | Labor rights in Tompkins County, New York State
Small Business Concerns as Relates to Living Wage
Since virtually all of the increased wages will be spent locally, the increase in consumer spending will benefit businesses. Above all else, small businesses need customers. A minimum wage increase will provide them. Especially in Ithaca and Tompkins County where the cost of basic housing is so exorbitant and takes an especially high share out of wages we will see a significant boost in non-housing consumer expenditure from the minimum wage increase.
A higher wage floor also benefits businesses because turnover will be less, workers will stay of the job longer and be more productive; turnover costs will go down and customer service will improve. For example, a recent study from Purdue University’s tourism management school concluded that the fast-food industry could accommodate a $15 an hour minimum wage through savings related to reduced turnover and small price increases not much greater than recent experience.
Many fast food restaurants are really franchises, which is to say small-medium sized businesses. Effective January 1 the minimum wage for workers in these small-medium sized businesses in NYS is already going to $15 (over a 3-year period in NYC; 6 years in the rest of the state). We have not heard of any of them closing, nor are any of them expected to close.
Since almost half of every dollar paid in property tax to the County pays for public needs programs, small businesses (along with everyone else) will also benefit from any reduction in County taxes as the need for this public assistance declines when working families begin earning a living wage. The minimum wage increase would also save the state budget hundreds of millions of dollars from reduced public assistance spending.
The fact that any minimum wage increase would be phased in over a 4, 5 or 6-year period gives all employers ample time to adapt to the increase, just as they have adapted to recent increases in the NYS minimum wage. Between 2013-15 the wage went up 20% and businesses adapted.
Increasing the wage floor “levels the playing field” meaning that those businesses that today do the right thing and pay decent wages (and hundreds of small and large businesses do) will no longer be put at a competitive disadvantage vis a vis other “low road” businesses.
The long run beneficial effects of raising wages and thus reducing poverty and improving life opportunities can make a real difference for the entire community (better educational results, lower crime, better housing maintenance etc.).
This is not “voodoo economics” nor wild economic notions. More than 200 leading economists have endorsed a $15 minimum wage, finding that raising the minimum wage “to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.” Public opinion polls in NYS also show strong support for increasing the minimum wage, approaching a two-thirds majority in favor.
And perhaps most important, raising the minimum wage to a living wage is the right and moral thing to do. No decent and developed society can allow so many people to toil so hard for so little. It is just plain wrong. Perhaps President Roosevelt said it well in 1933 – In my Inaugural I laid down the simple proposition that nobody is going to starve in this country. It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By “business” I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.