Tobacco Retailing - Tax Evasion - Motor Fuels - Beverage Retailing - Store Operations - Positions

Positions:  Increasing Minimum Wage and making Annual Raise an Entitlement

A.5132 by Member of Assembly Nolan
AN ACT to amend the labor law, in relation to the statutory minimum wage

The New York Association of Convenience Stores, representing nearly 5,000 retail establishments from Ridgewood to Rochester employing more than 32,000 full-time and part-time workers, strongly opposes increasing New York's minimum wage.

In raising the statutory minimum wage to $6.75 per hour in January 2002, A.5132a would artificially increase labor costs 31 percent across the board, with no corresponding increase in productivity. To recover these higher costs, small businesses like ours would have only two options:

1) Raise prices proportionately, triggering a round of inflation which would stifle Upstate New York's economic recovery; or...
2) Reduce staff and/or benefits, which would mean fewer job opportunities and less coverage for those the bill is ostensibly designed to help.

The assertion that the existing minimum wage is insufficient to support a family is valid only if it assumed that $5.15 an hour is the family's sole means of support. We challenge that assumption. In our industry, minimum-wage earners are not the primary breadwinner. The vast majority are teenagers, retirees, or other individuals who choose to work part-time to supplement household income. A targeted program already is in place to assist any low or moderate-income worker who is the head of household - the Earned Income Tax Credit.

Beyond 2002, the automatic annual wage increase mandated by A.5132a undermines the fundamental principle of merit pay. In our business, a worker earns a raise by doing a good job. This law would make it an entitlement irrespective of job performance.

It is reasonable to question why New York would consider acting at the state level while Congress is on the verge of raising the federal minimum wage, especially in light of the Legislature's action two years ago equalizing farm and non-farm wage floors with the understanding that the state minimum wage would be permanently aligned with the federal thereafter. Allowing Congress to make the first move will avoid placing New York convenience stores at a further competitive disadvantage with neighboring states.

If action at the state level is deemed necessary, instead of a minimum wage increase that would adversely affect the entire economy, NYACS would recommend:

1.) Adjusting the Earned Income Tax Credit;
2.) Offering incentives to employers to voluntarily pay new entry-level workers above-minimum wages, such as the Small Business Job Creation Wage Tax Credit described in A.2824 introduced by Members of Assembly Christensen, Matusow, Morelle, Kaufman, John, Magee, Pheffer, Tokasz, Koon, Gromack, Schimminger, and Magnarelli; or
3.) Both.

Market forces - not government - should determine wage levels in the private sector. Across the state, the labor shortage already has prompted the vast majority of New York convenience stores to increase overall wage rates in order to attract and retain qualified workers. For us, losing an employee to a higher-paying job is an everyday occurrence. Frustrating as that can be for employers, it is the law of supply and demand, and we accept it. Legislative intervention is not necessary.

In the interests of controlling inflation, encouraging job growth, and sustaining economic progress, NYACS respectfully but steadfastly opposes passage of this legislation.

March 14, 2001

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