President’s Letter: Tompkins County Minimum Wage Should Equal NYS Minimum Wage

Jennifer Tavares, CEcD, President and CEO

Tompkins County Minimum Wage Should Equal NYS Minimum Wage

The topic of minimum wage has once again come to the forefront in our local community. As many are aware – and the vast majority of our minimum & living wage survey respondents were – there are many individuals, businesses, and non-profit organizations advocating that Tompkins County set a local minimum wage equal to the “living wage” as calculated by Alternatives Federal Credit Union (AFCU).

That wage currently stands at $14.34 per hour. It is likely, however, that this recommended living wage will be substantially increased by August as AFCU rolls out their new living wage study results. It is noteworthy that many businesses and organizations are supportive of the increase, or report that it would not impact them because they already pay higher than the living wage.  But wage policy is extremely complex, and different types of businesses and non-profit organizations with such varied funding streams, revenue models, and cost drivers cannot all succeed in a one-size-fits-all wage policy environment.

Though our survey is still open, over 60 businesses and non-profit organizations have already responded, and a clear majority are not supportive of such a rapid increase to the minimum wage. While many respondents already pay entry level employees substantially higher than the current minimum wage, $14.34 is more than $2 per hour greater than current entry level wage for 50% of respondents. NYS is increasing the upstate minimum wage to $12.50 in about three years, and $12.50 per hour is a higher wage than 75% of employers reported for entry level employees.

While the majority of respondents have not yet been approached to sign a petition requesting a local minimum wage increase to the AFCU designated living wage—75% of those individuals would NOT sign such a petition if asked. It’s not surprising when we review the responses to the question “Please rank how you feel about proposals for Tompkins County to set a minimum wage equal to $14.34 per hour”, that 53% were opposed or strongly opposed; 27% of respondents were in favor or strongly in favor; 17% were neutral, and 3% were not sure.

Among the first casualties of significantly higher minimum wages will be first-time job opportunities for high school students and internships, according to respondents. On-the-job training also takes a big hit; about 25% of survey respondents reported that they currently invest $500-999 on training new hires, and nearly 24% invest between $1,000 and $2,500 per employee. A combined 20% invest between $2,500 to more than $5,000 on each new entry level hire.

The impacts of less on-the-job training, less hiring of interns and less part-time summer help could be far reaching. Employers already report large skills gaps and difficulty finding qualified entry-level and semi-skilled workers; if they cannot afford to invest in training, and if they have more pressure placed on revenues by required higher wages and benefits costs (as well as other direct costs of increasing sales to increase revenue), they will be forced to push more work on existing workforce, or to cut jobs.

Over 70% of respondents indicated wage compression would be an issue for their business or organization. Other possible unintended consequences of such drastic immediate wage increases, as reported by survey respondents, include: cutting jobs (36%), raising prices (48%), not hiring interns (26%), not hiring high school students (26%), no seasonal help (29%), asking current employees to do more (19%), or closing (12%, or 7 businesses).

The Chamber respects that there are many opinions and perspectives on this issue. Tompkins County businesses and non-profits represent a broad cross-section of employer types within the local job market. The Chamber is supportive of businesses and non-profit organizations in implementing policies which align with their company values, and which help them attract and retain their best possible workforce.

Though our survey respondent pool is just a sampling of local employers, we cannot support a local minimum wage that is higher than the NYS minimum wage. This policy could place too many local businesses and non-profit organizations at risk; it could cost local residents their jobs; it could have the undesired impact of dis-incentivizing workforce development to meet the needs of area employers in the future; and it could render Tompkins County uncompetitive amongst our peers, which is already a significant challenge.