Gov. Andrew Cuomo’s proposed minimum wage increase would have a devastating effect on the agricultural community and possibly send consumers to neighboring states to purchase products, farmers and business owners said at a Monday press conference opposing the proposal ahead of the April 1 state budget deadline.
The proposal calls for the state to gradually increase the minimum wage to $15 an hour — 66 percent more than the current minimum — which, according to Jillanne Johnson of Kurt Weiss Greenhouses in Center Moriches, would “cripple every industry that’s here.”
Many of the approximately 30 people in attendance at Martha Clara Vineyards pointed out that an increased statewide minimum wage would lead to further wage increases across the board.
“A $15 minimum wage, I put the pencil to it, has the potential of raising our labor costs by 60 percent,” said Carl Novak of Half Hollow Nursery in Laurel. “It’s not just the $15 minimum wage. It also has the compression effect of people that are making slightly above $15 and a little more; we’re going to have to raise their hourly rate also.”
The minimum wage is currently $9.75 an hour, but farm employees make $12.41 an hour, Long Island Farm Bureau board member Bob Nolan said. He added that this proposal would increase those wages to between $18 and $22 an hour.
According to the Knowledge Exchange Report released by Farm Credit East in February, the implementation of a $15 minimum wage by 2021 would increase agricultural labor costs nationwide from $387 million to $622 million.
Farmers and landscapers also fear a higher minimum wage hike will send consumers elsewhere to purchase products, since neighboring states have significantly lower wages. Mr. Nolan said some of his biggest competitors are from New Jersey, Michigan and Pennsylvania, which have minimum wages of $8.38, $8.50 and $7.25 an hour, respectively. Because they have a lower cost of production, they can sell their products cheaper, he said.
Larry Kaiser, who owns a landscaping company with his wife, said the increase will not only change minimum wage payments, but also costs for taxes, liability insurance and workers’ compensation.
“Conceivably, if it’s a $15 an hour minimum wage, our labor costs are going to be $20 to $21 an hour,” he said. “In a perfect business world you try to triple your labor costs. Who’s going to agree or want to pay $60, $67, $70 an hour for us to come in and rake leaves and do manual labor?”
Julie Marchesella, president of the Nassau Chambers of Commerce, said mom-and-pop enterprises have already seen a downturn in business, as their owners must compete with the Internet and she only sees the situation getting worse if the minimum wage increases.
Assemblyman Anthony Palumbo (R-New Suffolk) agreed, saying he predicts farm stands and smaller businesses that require seasonal help will lose a majority of their revenue due to income tax increases, requiring them to either hire fewer employees or pay workers off the books.
“It will absolutely devastate business the way I see it, quite honestly,” Mr. Palumbo said.
Not-for-profits, such as East End Disability Associates and Aid to the Developmentally Disabled, rely mostly on state funding to pay their employees. And while the governor has released a plan to raise the minimum wages statewide, there’s been no mention of a corresponding increase in state funding to cover that difference in labor costs.
Matthew Kuriloff, EEDA’s manager of development and public relations, said in an interview last week that most of EEDA’s budget is spent on payroll. Almost the entirety of this comes from the state in the form of Medicaid payments, with just 5 percent coming from New York State contracts and grants or private foundation grants and donations. A minimum wage of $15 an hour would leave EEDA almost $1 million in the red, Mr. Kuriloff said.
Gov. Cuomo justified the hike by saying that there are people who work full-time yet don’t make a living wage. During January’s State of the State speech, he implied that the current minimum wage leaves many full-time employees below the poverty line, which in turn makes them eligible for welfare and food stamps — burdens that fall on taxpayers rather than on the companies that employ them.
Others, however, disagree.
“Minimum wage was not created to be a living wage,” Mr. Nolan said. “It’s just a starting wage.”
Photo Caption: Carl Novak from Half Hollow Nursery speaks at the meeting Monday. (Credit: Nicole Smith)