Minimum Wage Bill Bad for Small Business and Family Farms

Will lead to job losses and higher unemployment

Assemblyman Phil Palmesano (R,C,I – Corning) today voted against Assembly Bill 9148, a job-killing mandate that would increase costs for job creators by more than $2,900 per minimum wage earning employee, [i]. The bill will raise the minimum wage from $7.25 to $8.50 an hour and provide for an annual cost of living increase escalator.

“At a time when small businesses and family farms continue to struggle with rising costs in a struggling economy, this bill will add even more costs to the very people we want to invest in our economy and create jobs,” said Palmesano. “Unfortunately, this legislation will simply lead to more individuals on the unemployment line, negatively impacting the very individuals those supporting the bill are trying to help. With unemployment figures in our region higher than the national average, we need to work to put more people in jobs and not in the unemployment line.”

According to Palmesano, the escalator included within the bill would not only impact payroll costs, but also would increase other associated costs for employers, such as social security, Medicare, and workers’ compensation as well. It also would mean fewer young people having summer jobs. Furthermore, Palmesano noted that credible, independent research has pointed to minimum wage hikes increasing the number of poor or near poor families. [ii]

“Small businesses and family farms cannot continue to absorb the rising costs of operating a business,” said Palmesano. “They will be forced to cut costs they can control, which will mean a reduction in the workforce.”

Furthermore, according to a 2008 study by Cornell and American University, raising the minimum wage from $5.15 to $6.75 (which occurred in 2005 and 2006) reduced employment of less skilled 16- to 29-year-olds by 12.2 percent. It also projected that raising the minimum wage from $7.15 to $8.25 would result in a loss of 28,990 jobs, including those of more than 7,000 low-income workers.

“If we truly want to be open for business in New York, and if we want people working rather than standing on the unemployment line, then we must work to reduce the costs and regulations that are placed on our small business and family farms so they can and will invest back into our economy and create jobs.”

[i] “Minimum Wage Hike Would Cost Jobs, Set Back Fragile Economy,” Joint News Release from the Business

Council of New York State, Inc., National Federation of Independent Business, New York Farm Bureau and

Unshackle Upstate, April 18, 2012


[ii] “The Effects of Minimum Wages On The Distribution of Family Incomes: A Non-Parametric Analysis,” David

Neumark, Mark Schweitzer and William Wascher, National Bureau of Economic Research, April 1998,