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As local businesses adjust to Long Island City’s new $16 minimum wage, some employers said they are concerned about the impact higher labor costs will have on their ability to compete in an already high-wage business environment. .
Early last week, the minimum wage in Island, New York City and Westchester increased from $15 to $16 an hour. He is scheduled for another 50 cent price increase in both 2025 and 2026. After reaching $17, the floor will be indexed to inflation and increase at undetermined intervals starting in 2027.
Local business owners said they are concerned about their ability to operate profitably and compete with out-of-state companies.
Jack Wilson, president of Latin Food US Corporation of Bohemia, a wholesaler and importer of fresh produce and foods from Latin America, said the price increases will make his business less competitive.
“The cost of doing business here on Long Island has risen to the point where we are almost being forced out of the market,” said Wilson, who employs about 22 people at the facility. “I’m competing with a company based in Pennsylvania, and that puts me at a huge disadvantage.” Pennsylvania’s minimums match the federal minimums, and each hour is $7.25.
Mr. Wilson, who primarily employs employees in the warehouse and transportation industry, said that not only will wage increases directly impact his salary, but the third-party services his company uses will also cover the increase. He said he was raising prices to do so.
“Every time you call a mechanic, every time you bring your truck in for maintenance, all of these costs go up even more,” he said. “The overall cost of running my business is significantly higher compared to other locations.”
As a result, he said, they often have to make cost sacrifices to remain competitive and face losing sales opportunities to businesses in states with lower minimum wages.
“There have been times when our prices have been 15% to 20% higher because of the labor costs here on Long Island,” Wilson said.
Dorothy Roberts, president of the Long Island Hospitality Association, said many hospitality employers have already phased in minimum wage increases, but “anything that’s business-mandated is always a concern. That’s true.”
The industry was hit hard by early pandemic closures and a drop in tourism, and businesses in the sector are only now starting to get back on their feet, he said.
“The hospitality industry was devastated during COVID-19 and a year after,” Roberts said. “We still see 2022 as a year of recovery, and 2023 will be the first year we actually make some profit.”
Noreen Caro, owner of LMN Printing of New York, said she understands that working Islanders need to earn more during a time of high prices, but that rising wages will hit small businesses the hardest. Ta.
“Eight years ago, the minimum wage was about $10 an hour, and then it slowly went up,” Caro said. “It’s not that it shouldn’t go up, because everything goes up. But is it fair to go to $16? I just don’t think it’s reasonable.”
Caro, who employs about six people and provides commercial printing services, said it’s more difficult to compete not only with out-of-state companies but also with global companies.
Caro said the state should do more to help small businesses cover the higher labor costs mandated.
“Who will turn around and help me?” said Caro.
However, some business groups said the increase would be an opportunity for small and medium-sized businesses on the island to increase consumer spending.
Luis Vasquez, president of the Long Island Hispanic Chamber of Commerce, said the increase to $16 is “a positive beginning to closing the wage gap that exists, and that higher wages will benefit underserved Hispanic communities.” “It means reducing economic disparity.”
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“To offset the economic burden that small businesses may experience as a result of minimum wage increases, we recommend that federal, state, and local governments increase funding to support small businesses,” he said in an email. said.
“An expensive place to live”
Wage increases have been necessary for low-income workers for years, even before the pandemic, and that continues to be the case now, said Mary Ann Traciatti, director of labor studies at Hofstra University.
“Long Island, New York City, Westchester, these are very expensive places to live,” she said.
“While some small businesses may be hit hard, the reality is that people are really struggling to survive in these minimum wage jobs,” Trasciatti said.
He said employers should lobby the federal government to raise the $7.25 national minimum wage to a parity level.
Small business owners “shouldn’t be penalized just because they’re in New York, but the federal government needs to step up.”
Phil Andrews, president of the Long Island African American Chamber of Commerce, said he supports the increase.
“If you don’t pay people a decent wage, you’re going to see more turnover,” Andrews said. “I think companies are realizing that there is a talent shortage.”
Mr. Andrews is a member of the Fair Minimum Wage Coalition, a coalition of more than 300 companies and business organizations in the state that advocates for further increases in the state’s minimum wage.
Joe Fiorini is co-owner of Fiorini Landscape & Snow Removal, a Melville-based family-owned business that employs more than 40 workers at wages of $17 to $25 an hour during the busy summer season.
Fiorini, like Wilson and Caro, said he agrees that raises are needed.
“As a business owner, I see where they are coming from because the cost of living is going up,” he said.
At the same time, Fiorini said the increase has to come from somewhere.
“It’s obviously going to be bad for business. I hope customers understand that it’s all inevitable,” he said. “Someone has to pay for it.”
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