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Backlash to Governor Cuomo's $15 an hour minimum wage proposal begins

Posted by Karen DeWitt on

As momentum for Governor Cuomo’s proposal to raise the state’s minimum wage to $15 an hour grows, opponents are trying to fight back. Small Business groups, farmers and others who employ low wage workers  are organizing, and a fiscally conservative group is out with a study showing potential job losses.

Patrick Pipino owns a Ben and Jerry’s ice cream shop in Saratoga Springs. He says Governor Cuomo’s proposal to push the state’s minimum wage up to $15 an hours simply is not based on the reality of small business economics. He says when he started his shop 19 years ago, with an MBA and ten years of management experience, he made only $15 an hour.

“You’re asking me, Governor Cuomo, to pay my staff who are 15,  with no job experience. $15 an hour, plus tips,” Pipino said.

Art Price owns a Roto Rooter plumbing and septic tank cleaning franchise in Binghamton. He says he knows that what he refers to as “cleaning pipes” is not the easiest job, so he says he pays more than $15 an hour to his trained workers. He says if the minimum wage is $15 , though, he’ll have to pay , and charge even more.

“This is in a market that is extremely depressed,” Price said. “My customers are already complaining about my costs.”   

Pipino and Price are part of a coalition of small business owners who are joining with the Farm Bureau, the Restaurant and Tavern Association, convenience stores, and even ski centers to fight what they say is a false perception that the steep increase in the minimum wage would be good for workers.

Mike Durant is with the National Federation of Independent Businesses.

“We want to show the legislature and really the Albany bubble that the business community is largely united,” Durant said.

In addition, a fiscally conservative think tank is out with a study that shows potential effects of Governor Cuomo’s proposal to phase in an increase in the state’s minimum wage to $15 an hour.

Douglas Holtz- Eakin, formerly with the Congressional Budget Office and now with the American Action Forum, says raising the minimum wage by that will actually harm the state’s poorest, low wage and low skilled workers.

He says while there might not be massive lay offs, by fast food franchises, retailers, and other low wage industries, it could mean that those business will stop hiring new workers, and anywhere from 200,000 to nearly 600,000 new people will simply not be have the opportunity to get jobs at all.

“That seems like sort of a perverse way  to go about solving what is a genuine problem,” Holtz-Eakin said.

He says a more efficient way to give the working poor more money is to increase the Earned Income Tax Credit, and to encourage more low wage workers to sign up.  

Opponents have a steep hill to climb. Public opinion polls show the minimum wage is popular, particularly among those in New York City, Democrats and Minority voters. It is also backed and heavily promoted by the state’s major labor unions, with ads by the health care workers union SEIU.

Governor Cuomo even took his case to the state’s big business leaders.Cuomo offered to sweeten the plan with tax cuts for businesses.

“You could wind up with a win win here,” Cuomo told them.

The bill is expected to be a centerpiece of the governor’s agenda in the 2016 legislative session, which begins in two months.

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