A gigantic billboard in the middle of Time Square in New York City is catching attention. It’s not for scantily-clad models or celebrities, but a message to Governor Michael Cuomo and New Yorkers: a $15 minimum wage (or $30,000 per year minimum salary) for somebody who is unskilled and new to the job is unfair for those who are actually that valuable to an employer.
This billboard represents the new front in the national debate over federal, state, and local minimum wage hikes. Campaigns and politicians are calling for minimum wages from $10.10 to $15 or higher to boost wages for the working poor –good intention, but bad policy.
The billboard depicts a laid-back young man (maybe a frat bro or a hipster) whose attention is peaked over learning that he can earn $30,000 a year with no experience and no skills. The message is that Cuomo’s minimum wage hike to $15 an hour will discourage young people from working hard.
Governor Cuomo’s plan for a new $15 minimum wage from the current $8.75 would take full effect by 2018 in New York City and 2021 in the rest of the state. The wage would apply to more than 100 fast food brands from Arby’s to Carvel Ice Cream Shoppes operating in New York with at least 30 locations nationwide.
The organization running the ad as well as a full-page ad in the New York Post says the minimum wage hike would just exacerbate youth unemployment because it would make it too expensive to hire people who have few skills and need a job to acquire these entry-level skills.
CNN Money reports:
The billboard is part of a $100,000 campaign by the Employment Policies Institute.
Richard Berman, the group's executive director, has a public relations and lobbying firm that has worked for the restaurant industry.
"Who needs an education or hard work when Gov. Cuomo is raising the minimum wage to 15 dollars an hour?" reads the sign. It's referring to the New York governor's plan to raise the minimum wage plan to $15 an hour for fast food workers in New York City by 2018 and statewide by 2021.
Mike Saltsman, research director for the organization, said raising the minimum wage to $15 an hour "devalues the hard work of people who have already put the effort into working their way up."
"What we're essentially saying are people who are having their first day on the job, who are maybe 16 years old, are going to get the same wage, or maybe a dollar less, then maybe somebody who's been there for a couple of years," he said.
More concerned about the NY wage hike are small businesses, including those not directly affected by the minimum wage increase but fear being forced to hike their wages to uneconomic levels to compete for talent. Small business owners now find themselves in a quandary: at some point, raising prices will drive customers away, so how long can they absorb increased wage costs? In addition, when does it no longer become financially possible to stay in business?
USA Today reports on a restaurant owner and car wash owner.
Anthony Ripani, owner of Calabria Restaurant in Orangeburg, is worried about the ripple effect.
“The percentages in this business have diminished, diminished, diminished,” Ripani said. “If they make the minimum wage $15, I’m like, ‘Where’s that gonna come from?' "
While Ripani wouldn’t be required to pay $15 an hour — he has too few employees — he said he’ll be forced to match that wage to keep his cooks and dishwashers.
Passing costs on to his customers isn’t a real option, Ripani said, as there’s a price point for pizza that, when eclipsed, will drive customers away.
Lloyd Monaco at Our Town Car Wash said he knows his price point.
“People will pay $7 for a car wash,” he said, as a steady stream of cars snaked its way through suds and blowers. “If I raise my prices, they won’t be back.”
Small businesses are the engine of economic and job growth creating six out of ten jobs in this economy. Workplace regulations can stimulate greater job creation or stifle it and it appears politicians like Governor Cuomo would rather see the latter in his state.
The intentions to raise wages may be fine, but the means will ignite rippling impacts that will negatively impact business owners and workers. Those meant to be helped will be the ones harmed by wage increases. As we often ask, what good is a $15 salary when you’re unemployed?