NORWICH – In response to Democrat Assemblyman Sheldon Silver’s proposal to increase New York State minimum wage from $7.25 per hour to $8.50, opinions differ among many city employers and workers regarding the impact it would have locally.
While city area employers said they can see both sides of the argument, opinions of the overall effectiveness that a wage increase will have in stimulating the economy vary. According to the U.S. Census Bureau website, 19.5 percent of the city’s population was at or below poverty level in 2010. This is higher than the 14.2 percent state poverty rate, and the national rate of 13.8 percent – observations that are fueling many legislators to follow up on Silver’s proposition and getting mixed feedback in the area.
Human Resources Director for the City of Norwich Deborah Deforest said raising pay for the 40 minimum wage employees who work for the city would have pros and cons from a business standpoint alone. While on one hand, it would be easier to recruit new employees, she said, there are also concerns about rising costs that are contingent on employee wages, including benefits and retirement. Perhaps the biggest obstacle, she added, would be the diminishing pay gap between experienced workers and newly hired employees.
If minimum wage were to go up, Deforest would be hiring new workers at a pay rate close to that of more experienced city employees. “The difficulty would be that compression,” she said, citing that many city workers are also part of a union and as wages of new laborers go up, there will likely be demand for higher pay of veteran employees. “It will definitely make negotiations with unions more difficult.”
“I’m all for it ... If it improves peoples’ lives and the culture, why not?” said Garf’s Deli owner John Stewart. “People need to make a living and you can’t begrudge them for that.”
Garf’s Deli employs between 8 and 11 people year-round and while Stewart said he pays most employees above the current minimum wage, his concerns regarding compression align with Deforest’s and he admitted that if passed, the new wage legislation would also have an impact on his food prices in order to maintain a profit margin.
Stewart noted that last time minimum wage increased, it was done so in increments – a strategy he hopes will be used again if Silver’s proposal is passed. “Whether wages are $7.25 or $8.50, we’ll figure it out and be here for the community,” he added.
As much an impact raising minimum wage would have on the private business sector, non-profit organizations like the Norwich Family YMCA would be faced with other budget challenges to accommodate operating costs and would also be forced to re-evaluate the application process for its scholarships, according to YMCA Executive Director Jamey Mullen.
“It’s a debate of minimum wage versus living wage,” Mullen said, adding that he is neither for nor against the wage increase.
Nearly 70 percent of the YMCA staff make less than the proposed $8.50 per hour. The last time wages increased, the net effect was $45,000 at the Y, Mullen said. More wage increases would lead to a possible rise in membership and program fees unless there was an increase in donations.
While employers’ opinions stagger between the advantages and disadvantages of wage increases, many minimum wage employees like Taylor Loucks, who works for $7.25 an hour at a local restaurant, say a wage increase will bring only prosperity to a struggling economy.
“I feel great about it,” Loucks said, noting that higher pay will allow her to more easily save for her pursuit of a college education. “When you’re making minimum wage, you’re living day to day ... In the long run, I feel like this would help the economy because more people have more money coming in.”