Samantha Christmann | March 7, 2023

The state's minimum wage is headed toward $15 per hour. But a group of business owners said it doesn't go far enough to ensure an appropriate wage for working people, and are pushing to tie the minimum wage to inflation.

Advocates of the Raise the Wage Act say gains made by minimum wage increases have been eroded by inflation. The bill calls for indexing the minimum wage – tying it to inflation rates and moving the minimum wage by a corresponding percentage annually. And, to make up for the years that didn't happen, it calls for increasing the minimum wage to $21.25 per hour.

At her State of the State Address in January, New York State Gov. Kathy Hochul announced her own plan to increase the minimum wage annually by tying it to the inflation rate.

"Our common sense plan to peg the minimum wage to inflation will not only put more money into the pockets of hundreds of thousands of hardworking New Yorkers, it will also provide predictability for employers and spur more spending in local economies and businesses," she said.

But others in the business community said an increased minimum wage would be harmful for Western New York businesses. The Buffalo Niagara Partnership, the region's largest business advocacy group, opposed the minimum wage in its 2023 advocacy agenda, arguing that market forces should dictate the wage floor.

And according to a study of the Raise the Wage Act, the National Federation of Independent Business showed it could cost the state approximately 130,000 jobs over 10 years.

Advocates, however, say a higher minimum wage would provide some relief to families working sometimes as much as 80 hours per week and still struggling to make ends meet.

"One major cause of poverty is jobs that do not pay enough," said Andrea Ó Súilleabháin, executive director at the Partnership for the Public Good. "This is especially true in Buffalo Niagara, even more than the rest of the nation, where we've seen a replacement of manufacturing jobs with lower paying less secure service industry jobs. This has resulted in a real migration of people from the lower middle class to low income working poor."

Market forces – especially the low unemployment rate and the competition among businesses for qualified workers – have been pushing up wages across the region, making the minimum wage less relevant.

Since the pandemic, the number of workers earning the minimum wage has plummeted by nearly 60%, the state Division of the Budget reported last year when it recommended the latest increase in the base wage. Slightly less than 6% of all upstate workers currently earn the minimum wage.

"We are very aware that there are far too many people in our community who are chronically underemployed, and sometimes working multiple jobs and still have trouble, still struggling to support their family, said Grant Loomis, vice president at the Buffalo Niagara Partnership. "That's a problem that all of us need to be invested in solving. We would argue that the way to solve that is ensure that we are training people for in-demand positions that pay well."
 
 Pushing the minimum wage higher each year is not a sustainable solution, he said.

"You see most entry level jobs in our region currently paying above minimum wage because that's what the market is dictating," Loomis said. "Despite the fact that New York has a higher minimum wage than most every state, most starting salaries for entry level jobs are exceeding that rate by $1, $2, $3. And sometimes additional bonuses on top of that. So we would argue that the market needs to be allowed to work."

Aaron Bartley, owner of Fitz Books and Waffles on Ellicott Street, is one of the 35 Buffalo-area businesses that is part of the New York Business for a Fair Minimum Wage Coalition. He said it's in his own best interest to pay workers more, because workers are customers.

"A lot of folks who read books are workers, too. They are counting their pennies and they love buying used books, and I know that if they had a few extra dollars they'd buy a few extra books," he said.

Paying more has helped Bartley retain workers, too, he said.

"We're not just thinking about extracting every cent out of every hour," he said. "Turnover is costly."

Many of the 200 businesses in the coalition are small firms, with just a handful of workers, or aren't as dependent on entry-level labor. Bartley has three workers and pays a minimum of $15 per hour, slightly above the upstate New York minimum of $14.20 an hour.

"I can't speak for [bigger businesses] but I just think the positive impacts outweigh the negative ones," he said. "Living in a city that has a healthy, equitable culture is gonna help small business in this town. And I would think that would be true for businesses with 30 employees as much as it is for my business."

Annie Adams, owner of consignment shop Second Chic on Elmwood Avenue, has 12 workers. 

"Most businesses in Buffalo and across New York are small businesses like mine," she said. "The minimum wage should be a decent wage floor, however many employees you have."

Second Chic pays a starting wage of $15 per hour and gives annual raises, bonuses and sales commissions.

"I’m not worried about being able to afford increasing our starting wage under the proposed legislation because I’ve seen firsthand how investing in employees generates business growth," Adams said. "There is no way we would be able to grow as we have without the dedication and expertise of our employees."

State Sen. Sean Ryan, D-Buffalo, said he has seen less pushback than usual to the state's scheduled incremental minimum wage increase, because business owners are already paying workers higher wages out of necessity.

"You're not really hearing anything this year, because business owners are already ahead of it," he said. "What you're hearing is that they need more workers for more hours in order to run their business."

But if market forces are already increasing starting wages, why bother pushing to increase the minimum wage?

"Now's the time to have the law catch up," Ryan said.