March 22, 2016

Farmers, business owners fight $15/hour wage plan

farmBob Ellis/staff photographer
Dave Law, owner of CNY Power Sports, CNY Farm Supply, and CNY Rental speaks as his sons Tim, left, and Eric look on during a Farm Bureau-sponsored press conference by a coalition of farmers and business owners stating how increasing the minimum wage will hurt their businesses. At right is Bradd Vickers, President of the Chenango County Farm Bureau.

Associate Editor

CORTLANDVILLE — Dave Law would get hurt both ways if New York were to raise its minimum wage to $15 an hour:
• He’d have to pay his workers at CNY Farm Supply and other businesses more, even though his customers — mostly farmers — couldn’t afford increased prices themselves.
• His customers — those same farmers — would cut their budgets for maintenance and new equipment if they have to divert the money to payroll.
“We’re all governed by the price of milk,” Law said Monday after a news conference opposing Gov. Andrew Cuomo’s proposal to raise the minimum wage from its current $9 an hour in increments over the next five years.
The plan has brought wide-ranging speculation about what would happen: A University of California at Berkeley study says it would raise average wages 23 percent by 2021 with no loss of employment. Yet Forbes magazine columnist Tim Worstall, using the same data, projects a 65,000 job loss.
Its support in the Republican-controlled state Senate is, at best, mixed.
“I have supported previous minimum wage increases, including the most recent raise which just went into effect on Jan. 1. That increase was the final stage of a phased-in plan which was developed with expert input from business and labor alike,” said Sen. Jim Seward (R-Milford). “As I have stated previously, I am not supportive of the minimum wage increase plan as presented by the governor. While discussions and research continue, we have to be certain that any possible agreement is fair to our employers and employees, and does not harm our tenuous upstate economy.”
The increase would cost employers a bit more than $12,000 a year per minimum wage employee. And that’s painful enough, farmers and business owners said at Monday’s the event, held by Farm Bureau members and the Cortland County Chamber of Commerce at Law’s business on Route 11 in Cortlandville.
But then there are the payroll and other taxes on top of that, and what does a boss tell experienced workers who suddenly find themselves making as much as the brand-new guy who started last week?
“I would love to pay a higher minimum wage,” said Renee Neiderman, owner of Bev & Co., a clothing store in Homer. “But I have a payroll budget we have to go by. Most businesses cannot raise their prices that much. Then sales will go down because customer service will suffer.”
Two farmers at the news conference, John Young near Tully and Eric Carey of Groton, both said they already pay more than the $9 hourly wage, but a 67 percent increase, even over five years, would be a job-killer.
“Do you cut hours? Do you fire? Do you consolidate work?” Carey asked.
“What do I tell my long-term employees?” asked Paul Fouts, District 5 director with the state Farm Bureau and a Groton farmer. “We just raised it to $9. Let’s take the time to let that settle out.”
The settling goes far beyond a farm or single business, said Mark James, membership and leadership development specialist of the Farm Bureau. An increase in the minimum wage would put pressure to raises salaries in all industries, including public employment. “Are school districts and municipalities going to be able to keep their 2 percent cap?” he asked.
Fouts, who was joined by Farm Bureau representatives from Cortland, Chenango and Madison counties in one of 14 similar news conferences statewide, expects 2,000 of New York’s 35,537 farms will no longer be profitable.
The number may be larger, suggests Mike McMahon, owner of E-Z Acres in Homer. Milk prices are already so low that his 700-cow farm expects to lose $500,000 this year because the cost of production exceeds to the price received for the product. What would an increased minimum wage cost him? Another $330,000 to $500,000. Every farmer faces that.
“The auctions are already cropping up,” McMahon said. “And how long before $15 is the new $9?”
“Hopefully, this won’t happen,” Young said. “I’d like to keep farming.”

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