STATE LEGISLATION SET TO SLOW ECONOMIC GROWTH
Minimum Wage Increase poses a significant threat to Manufacturers and small businesses.
HAUPPAUGE, NY (April 6, 2023)- New York’s harsh business climate is a chief contributor to slow economic growth and job loss across the Empire State. Obstructive legislation such as the proposed minimum wage increase has proven in the past to be a significant factor in reduced worker hours, income reductions, and closures on upstate farms, downstate manufacturers, and along main streets in every town. IgniteLI urges our state representatives to consider the economic impact of this and other job-killing bills in the annual State Budget.
S. 1978 & A.2204-A force the minimum wage to $20 per hour, and as high as $21.25 in other regions of the state, creating an additional burden on growth, small business, and job creators, at a time when economic experts warn of a pending downturn in the global economy. In a study published by NFIB to measure the economic impact of the wage proposal, they found that “over the next ten years approximately 128,000 jobs would be lost in New York State. Almost 83,000 or 65%, of job losses, would be suffered by small businesses with nearly 30% coming at the expense of firms with less than 20 employees. The cumulative real economic output loss, as a result of such minimum wage hikes, by 2033 would exceed $19 billion, or 60%, of that lost economic output, would have been produced by small businesses.” (NFIB)
Moreover, a Federal Reserve Bank of New York indicated that 40% of manufacturers have increased automation at factories since 2016, the last time New York imposed an increase in the minimum wage. The Federal Reserve Bank of New York also expressed that “automation has increased in about 20% of service firms. Both surveys found that the total number of workers employed, entry-level workers employed, and weekly hours worked, had all decreased in both industries.” (NIFB)
“Long Island’s manufacturing sector is already challenged by the war on talent, housing crisis, supply chain strains, inflation, and ongoing compliance requirements. Our operational costs far exceed our national competitors in this sector, causing us to be priced out of growth and business development. Another wage increase shift will continue to erode our regional industrial base at a time when we should be supported,” said IgniteLI President Anne Shybunko-Moore. With Long Island’s economy still recovering from the pandemic, the sudden increase in interest rates, and a looming economic downturn on the horizon, IgniteLI urges our State Representatives to vote no
on job-killing legislation like the minimum wage increase, to keep businesses, jobs, and families here on Long Island.
“Minimum wage is a problem for CPC and other businesses as it increases their labor costs and reduces their profitability. This can result in businesses cutting back on hiring, reducing hours for existing employees, or even closing down altogether,” said Jeffrey Reingold, COO of Contract Pharmacal Corp. Jeff went on to say, “Additionally, some argue that raising the minimum wage can lead to inflation, as businesses raise their prices to cover the higher labor costs. This can ultimately hurt the very workers that minimum wage laws are designed to protect, as the increased cost of living offsets the wage gains they receive.”
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IgniteLI is the not-for-profit 501c6 Trade Association of Long Island’s Manufacturing Industries. Serving Nassau and Suffolk Counties since 2016 the Manufacturing Consortium of Long Island advocates for industry through legislative lobbying, industrial training, business development, and more. Learn more at www.ignitelongisland.org.
