Some small-business owners endorsed the governor’s proposed minimum wage increase, while others said they are worried about its impact on their operations, during a discussion Thursday with the New York secretary of state at Sweet_ness 7 Café on Grant Street.
“It’s an imperative moral issue – people should be earning wages above the poverty line,” said Cesar Perales, who was in town to promote the governor’s proposal to raise the minimum wage to $10.50 by the end of 2016. “It’s also an imperative economic issue – if people earn more money, they’ll spend that money. It benefits the economy tremendously.”
Prish Moran, owner of Sweet_ness 7, which has a second location on Parkside Avenue and employs about 20, said she does not “have a problem paying my employees more. I wouldn’t have a business without them. I value them, so I pay them well.”
Moran was joined by 10 other business owners who sat at a table talking to Perales. William Breeser, who owns two manufacturing businesses on Niagara Street and an online company, said an increase would temporarily give the illusion of prosperity but prices for goods and services would eventually rise and negate that. “Eventually I’m going to have to pay my employees more,” said Breeser, who has more than 40 workers, who all earn more than the current minimum wage of $8.75.
But Perales said studies have shown the impact on the economy is overwhelmingly positive because working-class people are more likely to spend their money.
“They’re not going to the bank or investing in the stock market; put more money in their pockets, they’re going to spend it,” igniting a multiplying, positive effect on the economy, he said.
Lisa Hennig, owner of Globe Markets, which has two locations and about 24 employees earning more than the minimum wage, believes an increase would change the pay structure, prompting raises.
“You’re not just changing the minimum wage, because the employee earning $13, $14 would want more if it becomes $10.50,” she said. Hennig said small businesses are operating with smaller margins than larger chains that could withstand the increase.
Perales pointed out that the proposed increase is paired with a proposed cut to the small-business taxes, dropping the tax rate from 6.5 percent to 2.5 percent, to balance out the hit, he said. But Breeser said those cuts apply only to certain businesses.
Gabrielle Mattina, owner of two West Side restaurants that employ 55, wasn’t opposed to the increase, but said the upcoming wage of increase to $7.50 an hour for tip workers will force her to let go of two employees. She said it’ll be an additional $1,200 a week to the $4,200 she now pays in wages, and her businesses takes in $11,500 a week. Including tips, her waiters and bartenders make $15 to $20 an hour, more than she earns, but they aren’t reporting all of their income, she said.
Perales is touring the state promoting the increase. Other members of Gov. Andrew M. Cuomo’s administration are holding similar discussions statewide, pushing his 2015 Opportunity Agenda. Perales left the discussion for another in Rochester. He said business owners overall are receptive of the proposal, but have questions.