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Minimum wage increase before pay raises for state legislators

After missing an opportunity earlier this year to pass an increase in New York’s minimum wage, the state legislature is now expected to convene a special session in the coming weeks to consider a pay raise – for themselves.

As a business person and advocate for upstate local businesses, I cannot help but shake my head in disbelief. A minimum wage increase should take priority over a pay raise for legislators – not the other way around.

An increased minimum wage is good for business. At the current rate of $7.25 an hour, a full-time retail cashier, child care worker, security guard or health aide earning minimum wage makes just $15,080 a year. It hurts our local economies when workers are paid so little they have to work two jobs or rely on public assistance to make ends meet. By raising the minimum wage, we will have more dollars circulating in our communities, boosting our local businesses and our state.

Governor Cuomo has said that the state legislature must reconsider a minimum wage increase before receiving his support for salary increases for legislators. Opinion polls show that New Yorkers strongly back a minimum wage increase.

The Assembly has already approved a bill that would raise the state’s minimum wage to $8.50 per hour and index it to automatically rise with the cost of living each year. Unfortunately, this bill never even received a vote when it arrived at the Senate chamber last May. It’s time for the Senate to listen to the people and do its job by giving this proposal a vote.

The economic benefits of raising the minimum wage are clear: As summarized in a report last April by Senator Jeffrey Klein, raising New York’s minimum wage to $8.50 will boost the pay of over 1 million low-paid workers, generating $600 million in new statewide spending, and spurring job creation as consumers buy more at businesses around our state.

My experience has shown me that small business is the engine that drives our economy. Small businesses created 67 percent of the net new jobs from mid-2009 to 2011, according to the U.S. Small Business Administration. For every $100 spent at a local business, $68 recirculates in the regional economy, compared to only $43 when these dollars go to a national business.

Small businesses in New York understand the importance of investing in employees with higher wages. Businesses paying better wages see less costly turnover in their workforces and improved productivity and customer satisfaction.

Small businesses are more likely to pay above minimum wage than national chains. In retail, New York’s biggest low-wage sector, large companies pay wages that are actually 23 percent less on average than those paid by smaller retailers, according to the Fiscal Policy Institute.

A higher minimum wage would level the playing field for small businesses in New York and keep more dollars circulating in our local economy and our tax base instead of padding the profits of national and multinational corporations.

Raising the minimum wage would provide a much-needed lift to our economy by ensuring that cash-strapped consumers earn enough to afford the basic goods and services that businesses are eager to sell.

New York has an inexcusable gap between its high cost of living and low minimum wage. Our neighbors, Connecticut and Vermont, are among the 18 states that have raised their minimum wages above $7.25. Employers in New York are actually paying minimum wage workers less today, adjusted for inflation, than they did four decades ago. That makes no sense.

As we said in a Business for a Fair Minimum Wage statement signed by hundreds of New York businesses calling for a raise, “With far less buying power than it had four decades ago, today’s minimum wage means poverty for working families and weakens the consumer demand at the heart of our economy.”

Local businesses, low-paid workers and their families, and our communities cannot afford for Albany to drop the ball again. It’s time to raise the minimum wage and boost our state economy.

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Beam is president of Capital District Local First and Director at WSG.net. Capital District Local First is an independent business alliance in Albany, Rensselaer, Schenectady and Saratoga Counties.

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American Forum. 11/12

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