Raising the minimum wage in New York state would actually be a positive for small business owners, according to U.S. Sen. Kirsten Gillibrand.
She announced Tuesday, along with a new effort to increase the federal minimum wage from $7.25 an hour to $10.10 over the next three years. Additionally, she called for future increases indexed to the rate of inflation.
In his State of the Union speech, President Barack Obama called for a federal minimum wage increase to $9 an hour. In New York, Gov. Andrew Cuomo called for minimum wage to be increased to $8.75 during his State of the State address. The senator's proposal would enact the largest increase across the nation, if passed.
"It's simply unacceptable that in New York, a single parent working 40 hours a week, 52 weeks a year, to support a family earns just $290 a week," Gillibrand said. "That's only $15,000 a year without any time off. That salary is $3,000 below the poverty line for a family of three. We have to do better, and we need an economy that rewards hard work."
Gillibrand is one of the original co-sponsors of the Fair Minimum Wage Act of 2013, which she said would boost the incomes of an estimated 1.8 million New York workers. Additionally, she said raising minimum wage would generate an estimated $3.2 billion in wage increases for New Yorkers, which she predicts would spark new consumer spending at New York businesses.
"It's clear that by not having raised the federal minimum wage in four years, federal government is holding (minimum wage earners) and our economy back," she said. "Hundreds of thousands of full-time, hard-working New York families are living in poverty that don't have to, which also limits the potential for growth in local economies in every corner of our state."
The act would raise the minimum wage to $10.10 over the course of three years. Three months after the act is put into place, the federal wage would be boosted to $8.20 an hour. Minimum wage would be increased to $9.15 a year later and $10.10 a year after that.
"To keep up with the rising cost of living, the wage would be indexed to inflation every two years," Gillibrand said. "This is a common-sense measure that is long overdue. Boosting wages would not only lift poor working families above the poverty line and onto stable ground, but it could also drive economic activity and strengthen local economies."
In addition to minimum-wage workers getting an increase, tipped workers would see an increase for the first time in nearly 20 years under the act. Gillibrand said tipped workers would go from making $2.13 an hour to 70 percent of the minimum wage, in addition to tips.
When it comes to concerns about how small businesses would survive a minimum wage increase, Gillibrand dismissed the idea that there would be any difficulty.
"The number one complaint that small businesses have told me is that there's not enough demand," she said. "So, if you increase the amount of money millions of low-wage workers earn, you're going to increase demand. They will see an increase in their sales, an increase of people buying what they're selling."
Jonathon Welch, co-founder of About Talking Leaves Books in Buffalo, agreed with Gillibrand. He said many small businesses are in support of raising the minimum wage.
"We understand that lower employee turnover decreases the costs of constantly training new workers," Welch said. "A higher minimum wage ensures that our customers have some cash, and can afford to spend some money with us again."
Many of the small businesses the OBSERVER has spoken to recently said they would not be affected by a minimum wage increase, as they are already paying above the current $7.25. However, some had other ideas of how changes could be made, as opposed to raising minimum wage.
Herman Ruhlman, Rand Machine Products president, said instead of raising minimum wage, reduce the length of unemployment. He said instead of allowing skilled workers to be on unemployment for 99 weeks, get them motivated to work by dropping the length to 26.
"The problem is the government is paying more than what I can pay them,'' he said. ''These people with skills don't want to come to work, and I don't blame them, but it is wrong. People won't go to work until their unemployment runs out. We've had several people we wanted to hire, but they're making more on unemployment than by coming to work for us."