Another Mistake for New York State

Starting Jan 1st the great state of New York is going to raise its minimum wage. The wage hike is part of a three year increase finally settling at $7.15 an hour. Starting January first the new law will hike the rate up to $6.75 per hour as compared to the federal minimum wage law of $5.15 per hour. Now you may think this hike would be great for our economy and great for its workers, but it has a very negative effect on both.

For example, let’s say you own a small to medium size company, and in this case let’s say you have 20 employees and they all make minimum wage. You have an hourly salary expense of $103 dollars per hour. At that $103 dollar per hour it provides you with an excellent product, happy customers and employees along with a profit left over for the owners. (Note to liberals, that is how capitalism works) Well starting the first of the year, the new law will force you to pay these same employees $6.75 an hour. Well you do the math and now you are paying out an hourly salary of $135 dollars an hour. That’s a 34% increase in your operating expenses! Not to mention the increased taxes, social security, workers compensation, and so on. As a business owner you now have a choice to make in order to offset these increases in operation expenses. You can either increase the price of your product or service, or cut back on your hourly expenses. If you choose to raise the price of your product or service, you run the risk of pricing yourself out of the market and risk going out of business. If your product or service is in demand, and competition is limited, you simply pass the increase off to customers, in other words, to you! What most companies are forced to do here is trim back hourly expenses. This is very common in larger companies, and when I say larger, I am strictly talking about companies who employ more workers, not dollars. Larger companies have very fixed profit margins, and fixed price structures which are difficult to change. They are now forced to trim operating expenses. Now going back to your company, you are forced to cut back your employees to make up for the minimum wage increase. This means you have to layoff roughly 4-5 employees to get your hourly wages back to wear they were before the wage increase.

Now you have 5 employees out of work!
5 employees paying nothing into the tax system!
5 employees contributing nothing to the economy!

Now take these figures and multiply them across the large state of NY. You end up with more people out of work, less tax revenue, and a strangled economy. There is only one argument for the new minimum wage law, and it is weak at best. How can you expect a family to live off minimum wage? The truth of the matter is that minimum wage was never intended to be a guideline for a livable income. It is simply a benchmark for which an employer has to pay his employee by law, its simple as that! This is another huge mistake the state of NY is making. But what else can you expect from backwards politicians in the assembly, along with a liberal controlled senate. NY continues to fall behind in the job market along with a declining upstate population. High taxes and high unemployment is not the way to model your state.

7 Comments - Post your comment below.

Adam
Dec. 29, 2005

Verno, it is with great pleasure that I realize my opinions will always be expressed on this site without even having to post at all. If only we had more true capitalist-minded folks in this "great" state of New York, so many people would not continue to leave the state each year in search of residence in a state whose leadership posesses some common sense.

Chad
Dec. 29, 2005

That is a good point Adam! Taxes here in NYS are a whole other issue, but I am sure that Verno will touch upon that in a future post. I would be curious to find out what some of the other minimum wages are in other parts of the country. What is the minimum down there in PA Adam?

Here is an interesting quote from Federal Reserve Chairman Alan Greenspan -

The reason I object to the minimum wage is that I think it destroys jobs, and I think the evidence on that, in my judgement, is overwhelming.

If you are interested in reading more about minimum wage facts, I found this really great, detailed PDF you can download titled "Who Actually Earns the Minimum Wage". You can also Visit the Employment Policies Institute to read more on this. Enjoy :-)

Verno
Dec. 29, 2005

I love hearing people complain how theirs no jobs in New York. New York has one of the highest sales tax rates in the country! The highest Property tax rates in the country! The highest income tax rate in the country! And now we can chalk on the board, highest minimum wage in the country. So if you’re a company thinking of moving here, or thinking of expanding here - you might want to reconsider. You would have to be out of your mind! Vote these liberals out of office! Start with Sheldon Silver, Susan John, Chuck Schumer, and Hilary Clinton! Look at the 2 Liberal run states, New York and California. There bankrupt, welfare infested jokes! New York pays more money in Medicare than California and Florida combined! And we have a fraction of those states population! Would you liberals and unions break away from the hatred and power hungry left, and start to vote and side with America! Whose side are you really on?

Mike Rundle
Dec. 31, 2005

I was reading this post saying, wtf, is this actually Chad saying this stuff?

Then I realized it was the man, the myth, the legend, Mr. Dave Verno. Dave can say this kind of stuff because all his employees are paid under the table, so the rate hike doesn't cost him shit.

Hahahahah I kid, I kid!!!

Happy holidays man, best to the wife and kids... err, the cat. ;)

Verno
Jan. 2, 2006

All my employees are paid with checks and 1099 forms, and they make a lot more than minimum wage. Its hard to find good help, and when you got it, you keep it! lol I wish I had robots who can work 24/7 lol jk

Chad Lapa
Jan. 2, 2006

They actually do have robots doing a lot of work right now over in China. The company is called iRobot Corporation (IRBT) and they just IPO'd recently. They have been doing pretty well as of late also. Check out their site and see the new little nifty house cleaning bot they came out with. Just turn it on and go to work for the day and when you come, your house will be clean :-)