Business Council Opposes $15 Minimum Wage

Member Survey Finds Negatives Outweigh Positives

RYE BROOK, NY (March 22, 2016) — The Business Council of Westchester (BCW) today announced its strong opposition to Governor Cuomo’s proposed increase in the State Minimum Wage to $15 an hour and called on the members of Westchester’s State Legislative delegation to reject the increase.

The Council’s decision was reached following the results of an in-depth survey of chief executive officers and senior executives of BCW member businesses and organizations.  Nearly two thirds opposed the increase with significant numbers stating that the increase would result in reduced hiring, curtailed expansion plans and possible layoffs.

John Ravitz, Executive Vice President and Chief Operating Officer of Westchester’s largest business membership organization, said that “rather than having a knee-jerk reaction to the proposed increase, we asked our members to examine the consequences to their businesses including payroll taxes, benefits, overtime and hiring of seasonal employees and  Workforce Development youth.  We created a detailed member-survey. The results clearly demonstrate that the downsides to the increase far outweigh any gains and, in fact, could have unintended negative impacts on the low wage earners that it is intended to help.”

BCW President and Chief Executive Officer Marsha Gordon said that “while some of our members expressed support for the increase, the results and particularly the comments offered by many of those responding, demonstrated that however well-intended, the increase will damage New York’s competitive position and encourage some businesses to leave the state or cease operations entirely. Obviously that is not acceptable and the legislature should not enact the increase. We are sharing the survey findings with our Westchester state legislative delegation so that the members can understand the concerns of businesses and non-profits in their districts.”

Mount Kisco-based DataKey Consulting conducted the survey over a period of three weeks in February.  Of those responding, 77 percent were for profit businesses and the balance non-profits, with 96 percent of the respondents being CEOs or executive managers able to speak for their respective organizations.  The respondents employ from 10 to more than 100 employees representing 30 different industries and organizations.

Among the key conclusions of those who expressed opposition to the $15 wage:

• 97% said it would decrease their hiring from youth workforce development programs.
• 91% would likely or definitely hire fewer employees.
• 47% said it would somewhat or significantly drive up wages for other employees.
• 46% would likely or definitely curtail expansion plans.
• 42% would likley or definitely reduce employee benefits to make up for the increase.
• 37% said it would likely or definitely cause layoffs.
• 15% said they would need to close their businesses.

Ravitz said the BCW was particularly concerned about the potential impact on hiring young people who are in job training programs such as the Westchester-Putnam Youth Workforce Development Board that is managed by the BCW.  “We place 225 young people in summer jobs each year and these positions could be eliminated as a result of having a $15 minimum wage.  If the higher wage means fewer job opportunities, especially for young people, then it is self-defeating.”

The often stark comments offered by many of the survey respondents about the impact of a 50 precent hike in the minimum wage were revealing. Some examples follow:

• “I believe it could have a very negative effect on many small businesses and non-profits. Our organization has many young employees (students) who work part-time.  In most cases they are not supporting families, rent or mortgages.  It is not practical to pay a 16 or 17 year old $15 an hour for their first job.”

• “My employees would not end up making more money because if they kept their job their hours would be reduced, therefore netting the same amount or not being employed by us.”

• “I think the compression issue alone would be daunting as our long-tenured employees would resent entry-level employees coming in at a rate that is so high.”

• “Increased wages won’t magically increase productivity.”

About The Business Council of Westchester: The County’s largest and most influential business membership organization, The Business Council of Westchester is committed to helping businesses market, learn, advocate and grow. In addition, The Business Council of Westchester is actively involved in reviewing federal, state and county legislation and regulations in order to assess the potential impact on the business community and to influence the outcomes through advocacy when the business community’s interests may be affected. It also acts as an information resource for the business community and government leaders at all levels.