Westchester Business Organization Comes Out Against $15 Minimum Wage
Having just completed a member survey, The Business Council of Westchester (BCW) expressed strong opposition to Governor Cuomo’s proposed increase in the State Minimum Wage to $15 an hour, saying the negatives far outweigh the positives.
The organization called on the members of Westchester’s State Legislative delegation to reject the increase. The minimum wage in New York State rose to $9 per hour in January 2016.
The BCW survey of 1,000 chief executive officers and senior executives of member businesses and organizations, indicated that nearly two thirds opposed the increase with a significant number stating that the increase would result in reduced hiring, curtailed expansion plans and possible layoffs.
Of those companies responding, 76 percent have been in business for 10 or more years; 96 percent have their headquarters in New York State; 89 percent have their headquarters in Westchester County; 60 percent have revenues exceeding $1 million per year.
John Ravitz, Executive Vice President and Chief Operating Officer of BCW, said that “rather than having a knee-jerk reaction to the proposed increase, we asked our members to examine the consequences to their businesses including payroll taxes, benefits, overtime and hiring of seasonal employees and Workforce Development youth. We created a detailed member-survey. The results clearly demonstrate that the downsides to the increase far outweigh any gains and, in fact, could have unintended negative impacts on the low wage earners that it is intended to help.”
BCW President and Chief Executive Officer Marsha Gordon said that “while some of our members expressed support for the increase, the results and particularly the comments offered by many of those responding, demonstrated that however well-intended, the increase will damage New York’s competitive position and encourage some businesses to leave the state or cease operations entirely.”
Mount Kisco-based DataKey Consulting conducted the survey over a period of three weeks in February. Of those responding, 77 percent were for profit businesses and the balance non-profits, with 96 percent of the respondents being CEOs or executive managers able to speak for their respective organizations. The respondents employ from 10 to more than 100 employees representing 30 different industries and organizations.
Among the key conclusions of those who expressed opposition to the $15 wage: 97 percent said it would decrease their hiring from youth workforce development programs; 91 percent would likely or definitely hire fewer employees; 47 percent said it would somewhat or significantly drive up wages for other employees; 46 percent would likely or definitely curtail expansion plans; 42 percent would likley or definitely reduce employee benefits to make up for the increase; 37 percent said it would likely or definitely cause layoffs; 15 percent said they would need to close their businesses.
Ravitz said the BCW was particularly concerned about the potential impact on hiring young people who are in job training programs such as the Westchester-Putnam Youth Workforce Development Board that is managed by the BCW. “We place 225 young people in summer jobs each year and these positions could be eliminated as a result of having a $15 minimum wage. If the higher wage means fewer job opportunities, especially for young people, then it is self-defeating.”
The often stark comments offered by many of the survey respondents about the impact of a 50 precent hike in the minimum wage were revealing.
“I believe it could have a very negative effect on many small businesses and non-profits. Our organization has many young employees (students) who work part-time. In most cases they are not supporting families, rent or mortgages. It is not practical to pay a 16 or 17 year old $15 an hour for their first job,” wrote one respondent. Another said: “My employees would not end up making more money because if they kept their job their hours would be reduced, therefore netting the same amount or not being employed by us.” And, another: “I think the compression issue alone would be daunting as our long-tenured employees would resent entry-level employees coming in at a rate that is so high.”
