The following appeared in the Jan. 21, 2005 edition of Business First Buffalo:
http://www.bizjournals.com/buffalo/stories...editorial2.html and in response to this article on January 7, 2005: http://www.bizjournals.com/buffalo/stories...editorial2.html

Higher Minimum Wage Won't Hurt Economy
By: Mark Poloncarz
Date: January 21, 2005

Chris Koetzle concludes in his viewpoint published in the Jan. 7, 2005 edition of Buffalo Business First that the recent increase in New York State's minimum wage to $7.15 an hour by 2007 will "cause significant harm to small businesses and local economies, particularly in Upstate New York." Without quoting any factual sources, he goes on to note that the increase "is an anti-worker, anti-business policy that only leads to fewer jobs." However, when you examine the facts surrounding the issue nothing could be further from the truth.

According to a report issued in July of 2004 by the non-partisan Fiscal Policy Institute there is no evidence that a higher minimum wage would be harmful to New York's economy. It noted that the 2004 minimum wage was 71 percent lower than it was at its peak in 1970 when adjusted for inflation ($8.83 compared to $5.15). It determined that when fully phased in by 2007 the increase will directly benefit 740,000 New Yorkers, with most (58 percent) of the benefit going to workers in low wage families.

Moreover, the Institute concluded that an increase would actually benefit New York's economy. It found that in the 12 states that had a higher minimum wage than the federal base, from 1998 to 2004 job growth was greater than the level seen in states with the federal minimum (6.1 percent to 4.8 percent). Even when you take into account the ancillary business costs potentially resulting from the legislation, the Institute determined that for small businesses the number of businesses and rate of employment grew faster in the 12 higher wage states than in those where the federal minimum prevailed. It should be noted that the twelve higher wage states were not in the burgeoning economies of the south or southwest, but in the allegedly faltering economies of the northeast and west.

This analysis would seem to be confirmed by the 1999 annual report of the President's Council of Economic Advisers that concluded that the 1996 and 1997 federal minimum wage increase resulted in no adverse employment effects.

Furthermore, an increase in the minimum wage may provide additional positive impacts on other less quantifiable, yet important social and economic issues. For example, the non-partisan Center on Budget and Policy Priorities issued a report which found that a 1997 increase in Oregon's minimum wage above the federal minimum corresponded with a drop in participants in the state's welfare program, i.e., more welfare recipients went back to work because of the greater earning potential. Thus, the minimum wage increase could positively impact New York's economy by promoting the return to work of some welfare recipients, which in turn cuts welfare costs and increases the tax base.

While we will truly not know the economic impact of the minimum wage increase for some time, if recent history is any indicator, New York's legislature, including the Republican controlled Senate, was correct to override the governor's veto because the increase will produce benefits for all sectors of the economy, including upstate.

Mark Poloncarz, an attorney with Kavinoky Cook LLP, is co-founder of the WNY Coalition for Progress.

© Mark C. Poloncarz, 2005.

Article on WNY Coalition for Progress

WNY Coalition for Progress

The opinions expressed herein are solely those of the author and do not represent those of the WNY Coalition for Progress and commongroundcommonsense.org.

That was proven here in the Bay Area - Santa Cruz County has a "living wage" ordinance. Any contractors coming in must pay the exisitng living wage on their county-approved projects. This is to keep them from coming in with whole crews of undocumented workers ($20 a day if they are lucky and the guy's feeling benevolent - gotta love the Repubs)....

A single person in a "real" world would need $22.50 an hour wage to just EXIST at a minimum level in this area. That's why so many work 2 or three jobs JUST to survive.

It wasn't that way not that long ago. It was sooooo different before 1980.

This is a great example for the Media Respons Mark. Thank you for sharing it.

To our members:
Many of you may not have tried to be published before, use Marks example as a guide.

He gave references, he supported his argument with facts and pointed out the errors in the other person's argument.

If you do this and do it well, you can get published too.

As a small business owner, I can state unequivocally that a minimun wage hike will hurt me, and lead to reduced hiring, or a reduction in benefits, or both.
There are a lot of minimum wage workers out there (can't say how many) between the ages of 50 and 65, who work for the benefits only (health insurance mainly). Wages aren't as critical to them, because they're supplementing family income. But if they have to be the insurance carrier in the family, they'll take a low paid, low skilled position. We traditionally hire these types (plus high school kids in the summer) at minimum wage. The irony is, as payroll costs go up, resources left for insurance go down, and neither party gets what they need.
I don't need financial experts to tell me it's a good idea. Bad for business.

Health insurance with a minimum wage job?????? Sounds mutually exclusive to me....

I disagree with vitw . Owning 7 different types of companies, I think that the minimum
wage should start at $10/hr Why? After taxes what can you do with $300 /week

Minimum was set for hiring teenagers and non-exp staff. What you get today is people
trying to support themself and/or family. Illegal immigration is what is keeping the
minimium wage down.

My factory starts people off at $7.50/hr (NY) and offers them healtcare after the
90 probation period. On avg after 90 days people go to $8.50 and within a year
there at $10/hr Why? Again, happy people work better, stay longer (turnover costs
a lot of money, training .interviewing and firing if they do not work out)
The output ratio is 85-93% on any given day with less people working hard. When
we have a lull in production, they still get paid! Made in the USA means something.
We market the product and compete with China on it. We can turn a order out in a week vs a month for China (shipping,l/c...etc.)

I am sick of hearing how this would hurt there business. Its not quantity of people
its quality!!!! I have a store that the former manager had 5-8 people hanging around
all the time (mostly untrained) when I fired the manager and took over day to day
ops for 6 months I had to clean house. Now there are 4 people running the store
and you ask them a question they have the answer. They can find what you are looking for. Also wages are hire, benefits and inventory pilfering is gone 0%.

If the store continues to improve we may open another one by fall. This would mean
someone would be promoted to store manager and run the new store.

Just my $0.02

gmanders,
If you don't mind me asking, where in NY are you located?
Mark

A better way to do it that does NOT put the burden on the backs of small business owners was actuall begun under the Reagan Admin (believe it or not!):


I suggest that the Government should provide "earned income credits" based upon where a worker lives, and funded by the "excessive salaries" made by CEOs whose millions are made from the sweat of the workers who have no bargaining power.

If you live in a big expensive city, you might get a 5 to 8 dollar an hour supplement, but in a small, inexpensive rural town you might get 1 to 2 dollars an hour.

NOTICE THAT IF YOU DON'T WORK, YOU DON'T GET ANY SUPPLEMENTS.

This might help narrow the gap between rich and poor that has been widening for the past 35 years, yet it keeps the government out of the decision making process regarding what goods and services are to be produced.

The USSR proved that the "Command Economy" is a failure. Nothing that the people want gets produced. Combat boots, but no shoes. Maybe all for the same foot. And the wrong color.

"The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of communism is the equal sharing of miseries."


-Winston Churchill

Perhaps we could learn from history and find a happy medium. Or be doomed to repeat it.

This sounds likes socialism to me. Why not pay the CEO's and Execs anything
over $500,000 a year and spread the extra dough out to employee's and
shareholders?

vitw,
When you refer to a minimum wage hike as hurting you, are you referring to your end of the year profit as a small business owner, or that such an increase would be so detrimental as it will put you out of business?

I have often heard the argument that a hike in the minimum wage will close many small businesses, but the factual evidence does not back it up. If a business goes under it is usually for another reason.

There will be no year end profit. I'm struggling to shrink the losses.
See, from that point of view, government interference in the supply and demand of the labor market is unwelcome.
I always looked at minimum wage laws as necessary to prevent unreasonable exploitation. I never thought it was intended to guarantee a certain quality of life to entry level employees. When gmanders suggests we go to $10 it's no coincidence that that's also the voluntary salary level of choice for the company. What business owner wouldn't want to maximize salaries to keep everyone happy and anchored to the company? But we're not a socialist economy. The market determines reimbursement. The government needs to keep its nose out of my overhead expense.

I don't think that's a meaningful statement, because business failure is rarely due to any single cause. If I complained about Workers Comp costs you could say the same thing. Or liability costs. Or the cost of health insurance. The point is, keeping the lid on overhead can be a struggle, and when the government is working against you (don't forget the little matter of taxes) it doesn't make for a great environment for job creation.
One more thing about a minimun wage hike. Many business owners would refer to it as "The Burger King Effect" (no offense to fast food establishments). You always want to stay a step ahead of minimun wage, because there's no pride in being part of a team doing important work, and earning the same thing as a kid flipping burgers. When the minimun wage goes up significantly, you can't stay ahead anymore. And suddenly you find yourself competing for labor with places you didn't have to worry about before. Yet another real burden.

If you are struggling to shrink losses you are already bankrupt
One of the 1st signs is a/r and aging dates anything over 60 is gone

What kind of business are you in?
Are you computerized and use the system to its fullest extent?

My line of business is the computer /financial industry. I see other people books and
how bad they run there companies.

Family should stay family and is the #1 reason so many businesses never suceed
No Friends either! Keep your books straight 100% legit If you decide to cheat then do
it after the fact so you know what really is going on.

I see it everyday, people create excuses for failing! Re invent your company daily!