Last updated on August 28th, 2023 at 02:55 pm
Retailers in New York are about to see their labor costs increase thanks to new legislation that will result in a gradual minimum wage increase statewide. Mike Durant, president and CEO of the Food Industry Alliance of New York, said the recently concluded state assembly session stirred “heated debate” over the measure.
As it stands, the state’s minimum wage is separated into three region-based categories – New York City, Long Island and Westchester and the rest of New York. The first two regions share a common figure, $15 an hour, while it is $14.20 for everywhere else.
“Presumably, next year, it would have went up to $15. Lawmakers wanted to accelerate that…lawmakers wanted that number to be above $20,” Durant explained.
New York Gov. Kathy Hochul proposed indexing the current minimum wage to inflation. Meanwhile, the assembly pushed for the more than $20 rate alongside an inflation index. Lawmakers ended up “somewhere in the middle,” Durant said.
Starting next year, the two city market categories will raise their minimum wage 50 cents a year until hitting $17 an hour. At the same time, all other markets in the state will see the wage jump 80 cents to $15 an hour in 2024. That will increase until it reaches $16. Once the wage hikes reach their respective targets, they will then be tied to inflation.
While the FIANY pushed against the bill, Durant said he’s communicating to members that it could have been worse.
“We’re very transparent,” he said. “We communicate. That’s very important from the trade association perspective to communicate regularly with members.
“I think our members appreciate the real-time information and knew that when one party rules – and you have two countering proposals and different sides of the spectrum – it’s sort of a fool’s errand.
“We work hard with our partners in the business community to make that as palatable as possible.”
Durant went on to explain that certain economic conditions must be met before an inflationary wage increase is enacted. “There is some sensibility related to the inflation part as opposed to just having an automatic increase every year. So that’s a caveat. Thinking about it holistically, considering where it started, it was the better outcome.”
FIANY has been working to minimize some of the strain for retailers. New York is one of the last states that has an outstanding federal debt following the COVID-19 pandemic. Part of that repayment was being shouldered by businesses. Durant said the organization’s goal is to eliminate that.
Costs for retailers have always been high, according to Durant. He quoted The Tax Foundation’s State Business Tax Climate Index, published each October, which ranked New York as the 49th state in tax systems – edging out only neighboring New Jersey.
“I’ve used them or at least their data and other places…to show that New York is one of the worst states to do business,” Durant said.
Retailers could get some state help with the extension of the application deadline for the state’s $250 million COVID-19 Capital Costs Tax Credit. Small businesses with 100 or fewer employees have until Sept. 30 to apply.
A news release from Empire State Development states, “New York State small businesses that made investments to comply with emergency orders and regulations in response to COVID-19 can apply for a refundable tax credit of up to $25,000.”
Going forward, FIANY is watching a proposal by the New York City council that would ban biometric identification software.
“In light of the retail theft that runs rampant, biometric identification is one of the deterrence that retailers have. And this bill would basically get rid of that,” Durant said.
He said his organization has been “highly engaged” with the mayor’s office on the proposal.
According to an article by The New York Post, the measure would require private businesses and residential buildings to obtain customers’ written consent before capturing their biometric information. The bill also calls for a $5,000 fine per violation, as well as any legal fees involved.
FIANY is part of a group known as the Collective Action To Protect Our Stores, a coalition of 5,000 diverse small businesses from around the state.
Durant cited statistics from CAPS that New York retailers have lost an estimated $300 million in revenue due to theft. He also said there has been a 22 percent increase in crime in the state.
Read more market profiles from The Shelby Report.