Polls: Minimum wage increases have led to higher prices, more automation
Shoppers use self-checkout at a Home Depot improvement store Credit: AP/Nam Y. Huh
Manufacturers, retailers and service firms are using automated systems to perform more tasks after New York State raised its minimum wage in recent years, according to two polls released on Thursday.
The Federal Reserve Bank of New York survey found nearly four in 10 factory owners have increased “automation” on their production lines since 2016 when then-Gov. Andrew M. Cuomo and the State Legislature adopted an hourly minimum of $15 for much of the state.
In a separate survey, more than two in 10 retailers and other service firms said they had installed new labor-saving automated devices.
The bank conducted the polls of about 125 factories across the state and about 200 service firms in the metropolitan area from Feb. 2 to 9. Long Islanders participated in both.
The survey results come as the State Legislature weighs Gov. Kathy Hochul’s proposal to tie future minimum-wage hikes to the inflation rate.
In 2016, lawmakers agreed to raise the minimum wage rate from $9 per hour to $15 over several years in downstate. On Long Island, the rate reached $15 on Dec. 31, 2021.
The New York Fed found 62% of manufacturers and 52.5% of service firms were impacted, either directly or indirectly, by the state’s higher minimum wage.
Among these businesses, “the most widespread effect reported was on overall compensation costs, followed by the prices they charge — in both cases, of course, pushing them up,” the bank said on Thursday.
Nearly half the owners of factories and service firms said they are charging their customers more because they are paying employees more.
Hochul, in proposing another hike in the hourly minimum, said last month, “As a matter of fairness and social justice, I am proposing a plan to peg the minimum wage to inflation. If costs go up, so will wages …[But] we will put guardrails in place to make increases predictable for employers, and create flexibility in the event of a recession.”
Ashley Ranslow, state director of the National Federation of Independent Business, the governor's plan could force small businesses "to cut workers’ hours" and increase prices "for goods and services that all New Yorkers, including low-income workers, purchase.”
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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