The best way for state legislators in New York to support small businesses is to help us get our customers back.
Unfortunately, many policy-makers in Albany are trying to support small businesses by blocking policies needed to boost consumer demand. A case in point is the current proposal to raise the state minimum wage, which the Republican leadership in the State Senate has refused to consider even after the Assembly approved an increase.
Unlike The Buffalo News, which recently editorialized against raising the state minimum wage by invoking New York's anti-business reputation, many businesses support the proposal. As owner of a small business, I can say that our customers aren't spending like they used to. It is not the anti-business climate that has buttoned their wallets, but a seemingly endless recession. Most of our customers inhabit the valleys well below the 1 percent, in one of most impoverished cities in the nation. Their disposable income has been blasted by an under-regulated national economy over which they have no control.
A higher minimum wage helps to ensure that our customers have the cash they need to start spending again. Low-paid workers in particular have borne the brunt of shrinking paychecks over the past few decades. If the minimum wage had simply kept pace with the rising cost of living over the past few decades, it would be up to $10.70 today.
Against this backdrop, the proposal to raise the minimum wage to $8.50 seems modest. Yet such an increase would deliver valuable support to low-paid workers and the businesses where they spend their paychecks. According to the nonpartisan Fiscal Policy Institute, raising the minimum wage to $8.50 per hour would generate more than $600 million worth of economic activity. To a small, local businessperson, this seems a reasonable investment.
Moreover, the proposal would index the minimum wage to inflation so that its value automatically adjusts to keep pace with the cost of living. Indexing would not only protect the purchasing power of low-paid workers' paychecks, it would also give businesses like mine more certainty over our payroll costs.
Repressed minimum wages typically benefit large corporations more than small local businesses, with the ironic consequence of forcing customers to spend their dollars at national retailers who maintain artificially low prices in part by paying low wages themselves and by demanding concessions from their suppliers who also suppress wages. The bulk of the money spent with those retailers leaves our community.
Small businesses cannot survive if customers don't make enough to shop at our stores. I hope senators will awaken to the real-world challenges small business owners face and recognize how raising the minimum wage will help businesses, workers and the economy as a whole.?
Jonathon Welch is the owner of Talking Leaves Books in Buffalo.