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January 22, 2013

Wage hike proposal worries area pols

By Richard Whitby
The Daily Star

---- — Gov. Andrew Cuomo’s proposed in his State of the State address that New York raise the minimum wage by $1.50 an hour to $8.75. But the idea isn’t getting much support among area legislators.

Even Assemblyman Bill Magee of Nelson, a fellow Democrat, has some reservations about the governor’s plan.

“I haven’t made my final decision,” Magee said last week. “But I think it could be a negative impact on agriculture and tourism. … Both of them are big in my district.”

Republicans described an increase as a job-killing initiative that would disproportionately hurt segments of the local economy ill-suited to compensate for the additional cost.

“This is a mandated increase in the cost of doing business,” said Assemblyman Clifford Crouch, R-Guilford. “Many of our farms are mom-and-pop businesses across the state, with no avenue to increase your revenues (or) have cost savings to compensate for that.”

Assemblyman Pete Lopez, R-Schoharie, also warned of problems.

“Most of our jobs are provided by small businesses,” he said. “And many of our small businesses are just hanging on; they’re struggling. The danger is unless we can find a way to help take some of the financial pressure off them, the translation —  the strict translation between a minimum-wage increase and employment — will be to reduce numbers of jobs in the strictest sense.”

Assemblywoman Claudia Tenney, R-New Hartford, also saw an effect on the number of people employed.

“I just worry that we’re going to deny opportunities for employment to people who otherwise would just be sitting on unemployment or be unemployed,” she said.

She added that small businesses would suffer.

“Walmart, the big-box stores, the big companies, they’re not affected by the minimum-wage increase, because most of them are certainly not paying the minimum wage,” she said. “If anything, they’re for it, because all it does is make it harder for their smaller competitors.”

State Sen. James Seward, R-Milford, said through a spokesman that he, too, opposes the initiative.

“He’s willing to look at any legislation, obviously,” Seward spokesman Jeff Bishop said. “But at this point, an increase in the minimum wage would be counterproductive to job development, especially in our area, so … he is against a minimum-wage increase at this point.”

Most of the legislators said that they might be more receptive to a bill that softened the blow for small businesses.

“If the governor is sincere about moving this forward, which I think he is, we should be looking intelligently, thoughtfully at some tax incentives or other means of helping provide relief to small businesses, so that we’re not just robbing Peter to pay Paul,” Lopez said.

“If we can come to agreement with the small businesses and find a way to help provide them financial relief, and not just lay this at their feet, then we may have an ability to come to some common ground,” he added.

Tenney, however, opposes tax credits as an offset.

“That’s sensational for Walmart and the big-box stores, but devastating for small businesses,” she said. “You have to have profits to have tax credits to mean anything to you.”

Crouch saw a possibility for compromise if a minimum-wage hike were enacted with other reforms.

“I’d have to look at that,” he said. “We have been looking at workers’ comp reform for a number of years, unemployment reform, changes in the scaffolding law, which would save money for every business across the state. If we could get some serious reform for cost savings to these businesses, certainly that could be on the table for discussion.”

Tenney agreed that workers’ comp reform is overdue.

“New York, although we did make some small reforms four or five years ago, still has very expensive worker’s comp, with some of the worst benefits for employees,” she said. “That should be reversed.”

Magee said he thought a bill seeking a smaller increase also might be more palatable.

“That’s a possibility, yes,” he said.

Neither Crouch nor Lopez accepted the idea that the extra money in the pockets of minimum-wage earners would stimulate the upstate economy.

“Absolutely not,” Crouch said. “Somebody on minimum wage, if they get another dollar an hour, are they going to buy clothing made in New York state?”

“To some extent, it’s bound to occur, but the question is: Where are they buying the goods and services, and who’s profiting from that greater availability of spending power?” Lopez asked. “If people buy more clothing, there will be some pickup for retail sales, some pickup for distributors, but it may be more money flowing overseas with imports. It’s hard to say what the direct impact would be to the economy.”

All of the legislators agreed that any increase in the minimum wage proposed by Cuomo would pass in the Assembly, but they were less willing to predict its fate in the Senate, where Republicans and a few Democrats have formed a majority coalition.