New York governor calls for a devastatingly high minimum wage increase.
The New York Association of Convenience Stores has informed the Senate that the $15-an-hour statewide minimum wage being pushed by New York Governor Andrew Cuomo would backfire in the form of fewer jobs, reduced hours and benefits for remaining workers, higher prices for consumers, and severe financial stress for family-run convenience stores.
“Regrettably, as we enter 2016, the overarching policy debate in New York State centers not on how to create and retain jobs, but whether to make it two-thirds more expensive for private-sector employers to create and retain jobs,” NYACS President James Calvin said in written testimony submitted for a Senate Labor Committee public hearing Jan. 7.
This week, in name of “economic justice,” governor Cuomo is asking the Senate and Assembly to increase the state’s minimum wage by 67% to $15 an hour across-the-board—not just for experienced, full-time employees, but for part-time and entry-level workers as well.
“Mind you, New York has just completed a three-step, three-year increase in the state minimum wage approved by the governor and the Legislature that brought us from $7.25 in 2013 to $9 an hour today,” Calvin wrote. “The 24% pace of this increase was over eight times the national rate of inflation during that period, artificially driving up employer costs for not just wages, but payroll taxes, workers compensation and unemployment insurance. Another jump to $15 would be a torpedo to the side of New York small businesses.”
Governor Cuomo has made the $15 minimum wage a crusade, naming the campaign for his father, former governor Mario Cuomo, who died one year ago. To build momentum, he has already issued executive orders for “fast-food establishments” (including QSRs inside convenience stores) to pay a higher minimum wage than other employers and for the state and its university system to gradually increase the minimum wage of their workers to $15.
NYACS said convenience store owners confronted with such a lofty wage floor would have to eliminate jobs, raise prices proportionately, reduce store hours and/or cut employee hours and benefits—none of which would be good for the business, its employees or its consumers.
Automation such as ordering kiosks might be another response. “But state laws require convenience stores to verify the age of customers wishing to purchase beer, tobacco or lottery products, assist a disabled customer requesting help pumping gas, respond to any spills that occur at the fuel island, redeem Bottle Bill containers and perform a variety of other tasks that can only be performed by human beings,” Calvin explained. “Besides, it’s a people business. The essence of neighborhood retailing is people serving other people.”
Calvin said the marketplace should determine private-sector wage rates. “Market forces are the reason most of our employees already make more than the existing minimum wage, and why many of our members are currently having difficulty finding enough qualified workers to adequately staff their stores.”
“While proponents use the imagery of fat-cat corporate CEOs exploiting underpaid workers to justify a $15 minimum wage in New York, try telling that to the ‘CEO’ owners of a mom-and-pop convenience store in the Southern Tier who are forced to pay employees more and more as they lose customers right and left to competitors in lower-tax Pennsylvania and ‘tax-free’ tribal enterprises down the road because of senseless New York State tax policy.”
Calvin pointed out that as New York State drives up mandatory wage rates, it continues to impede the ability of convenience stores to afford higher wages. For example:
- The state minimum wage has risen 137% since 1990, but the statutory retail minimum markup on cigarettes, which is supposed to reflect the retailer’s cost of doing business, hasn’t been adjusted since then.
- Since 1967, the state minimum wage has risen 15 times by a total of 500%, while the commission paid to convenience stores on the sale of a $1 New York Lottery scratch-off ticket has remained at six cents.