New York is among the few states persuaded by labor activists to raise its minimum wage to $15 per hour. But in the vicious cycle of inflation, $15 per hour is not enough anymore. Pro-labor forces are pushing proposals that, if approved, will increase the minimum wage to $20 per hour or more.
While this boost would be positive for workers, it also is possible that it will be offset by inflation. That is the rise in prices for goods and services over time. When it happens, money purchasing power decreases. That means fewer goods and services than prior. It presents obstacles for low-wage workers living in the New York metropolitan area. New York City is tied with Singapore as the most expensive city in the world, according to a survey by EIU. (Economist Intelligence Unit Limited)
More simple, what would have cost $15 in 2015 is around $20 today. At least, according to the U.S. Bureau of Labor Statistics. Sen. Jessica Ramos, a Democrat representing parts of Queens, thinks so, too. “You can’t tell us that after the pandemic, that $15 is going to still be enough for us to keep food on our tables,” Ramos says. “That’s why we want $21.25, nothing less,” she added at a rally in Albany. “The price of everything is going up except for wages.”
Small businesses with tight profit margins feel the most immediate effects of inflation. They’re faced with two tough choices. Either absorb the rise in labor costs or have its customers pay higher prices. This affects the quality of service and incentives for better performance from workers. Both decisions risk losing business or workers to maintain a profit.
Barry Nicholson owns four retail businesses in Corning, New York, the AP reported. He says the wage increase to $21.25 would be “a smack in the face to small businesses.” There’s “no way I could handle that,” says Nicholson. He owns two UPS, women’s accessories, and modern home furnishings stores. “When you look at retail hospitality, we live and die by a couple of points at the end of the day. We’re not the big corporations everyone talks about.”
Yes, wage increases are critical in improving the standard of living for workers. But finding a balance is also. Local economies’ ability to thrive long-term depends on the financial vitality of their small businesses. Driving up the price of goods and services is not a long-term solution. A better one is, continuing to push for policies. With aims for economic justice not only for workers but businesses too.
