Small-business owners from New Jersey, New York and Connecticut discussed the regional impact on small businesses if the three states raise their minimum wages today during a conference call held by the National Federation for Independent Businesses.
Joe Olivo, owner of Perfect Printing, in Moorestown, said his business is competing with other printing companies around the United States and Canada for contracts, but has trouble bidding for jobs as the price of labor continues to increase.
“I put in a proposal last week for a national company to run a fulfillment center on a national basis for them,” Olivo said. “A dollar an hour in the context of one hour doesn’t sound like much, but if you look at what it would do to my labor rate over the course of a year with three to four employees. … The fact that I have to put in proposals that compete with companies in the Midwest, Southwest and Southeast … there’s a chance we don’t get this type of work, because our cost basis is much more than other companies.”
New Jersey’s minimum-wage hike is the furthest of the three states in the legislative process. Laurie Ehlbeck, NFIB director for New Jersey, said the bill has moved through committees and will be considered as part of the budgeting process in June.
Connecticut’s bill is likely to be passed through the state’s labor committee this afternoon, with rate increases of 75 cents per hour on July 1, 2012, and again on July 1, 2013. New York, which is wrapping up its state budget process, has several bills being proposed to raise the state’s minimum wage by $1.25, and tie the wage to the consumer price index to account for inflation.
Participants said that, instead of creating regional equity by raising the minimum wage at the same time, governments are missing the fact that regional small businesses will not be able to compete in the national or international markets.
Clarence Price, who owns a Roto-Rooter Sewer Service in Binghamton, N.Y., said businesses are moving away from New York because of the increased pressure from regulations, taxes and now a possible minimum wage increase.
Business owners said they would be less likely to hire untrained workers at the higher wage, would not add any new positions to their companies or replace labor with technology and automation.
Cris Mesanko, owner of Flow House amusement park on Long Beach Island, said after the state increased the minimum wage in 2005, his company’s margins decreased significantly, forcing layoffs and cutbacks on capital improvements.
“When you do less things, you’re also affecting the economy,” Mesanko said. “I’m buying less, doing less work, making (fewer) improvements. It’s not as simple as hiring less.”
Isabel Tartaglia, owner of the American Steak House chain, based in Monroe, Conn., said she thinks it’s “crazy that government is analyzing and debating this” as the economy just begins to recover. She added that she feels the market will increase wages without artificial help as the business environment improves.