A Column of News & Comment by Senator James L. Seward
As the New Year approaches, there are a great number of challenges ahead for individuals and families, government at all levels, non-profit organizations, and our business community. The COVID-19 pandemic has created enormous complications. Some of the issues are logistical – we all need to find new ways to accomplish everyday tasks. Many of the new problems are costly – particularly for our small and medium-sized businesses.
We have all seen businesses close their doors over the past nine months. Some have reopened, but many will remain shuttered for good. Moving forward, New York State needs to take steps to minimize the pain and help revive our economy.
I have had conversations with many small business owners and they are contending with new issues on a daily basis. Ever-changing and, at times, inconsistent state guidelines are high on the list of concerns. Employers are doing their best to comply with health and safety regulations and it is vital that the state collaborates with the business community to enact commonsense policies. Local government and health officials also bring a great deal to the table and the state needs to utilize their expertise.
It is also crucial that we assist employers with their bottom line. Revenue is down substantially for the vast majority of businesses as more people stay home and occupancy rates, particularly for restaurants, are reduced. At the same time, the cost of doing business (personal protective equipment, testing, sanitization, etc.) continues to rise.
One step the state can take to assist employers is to put a pause on minimum wage increases set to take effect on December 31.
The scheduled increase to the minimum wage could make this crisis worse. However, the law allows for the temporary suspension of the increases based on a report and recommendation from the Governor’s Director of Budget. Postponing the increases until small and mid-sized businesses are on a sturdy financial footing post-pandemic will save jobs across the state.
I have joined with several of my senate colleagues in writing a letter to the governor, which reads in part:
We believe that any increase to the minimum wage would have great and far-reaching consequences for businesses that are only barely staying afloat in the current state of this pandemic. According to the National Federation of Independent Businesses (NFIB), 90 percent of small businesses that received the Paycheck Protection Program (PPP) loans have entirely spent down those funds and are ready to initiate the process for loan forgiveness. PPP is a federal program designed to provide an incentive to small businesses to keep their workers on the payroll. Even with PPP and other programs, according to NFIB, approximately 20 percent of small business owners predict that they will go out of business in the next six months and another 19 percent anticipate that they will be out of business within a year. Any increases to the minimum wage are certain to exacerbate this problem.
We understand that countless individuals have struggled during this pandemic and continue to struggle. However, based upon the above and best information available to us, we believe that increasing the minimum wage in the middle of the COVID-19 pandemic would do more harm than good to those we represent. The state must avoid inflicting additional economic hardship on businesses and causing many small and medium-sized businesses, especially family-owned restaurants, to go out of business entirely – hurting businesses and workers alike.
Workers are putting in tremendous hours and doing everything they can to help keep our communities and small businesses afloat. I have no doubt that business owners would like nothing more than to increase pay across the board and reward their loyal employees. Unfortunately, forcing a higher minimum wage on employers at this time will lead to more unemployed workers and closed businesses. A temporary pause on the increase makes sense.