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LI minimum wage hike to $10 an hour Dec. 31 spurs hope, fear

Karl Novak, president of the Long Island Farm

Karl Novak, president of the Long Island Farm Bureau and general manager of Half Hollow Nursery in Laurel, believes the minimum wage increase will hurt local farms. "At $10 an hour, our labor costs are increased by 11 percent," he said. Above, Novak is pictured at the nursery on Thursday, Dec. 29, 2016. Credit: Randee Daddona

Long Islanders earning the minimum wage and, indirectly, many more making near the minimum wage, will get a pay raise on Dec. 31.

The new minimum wage is $10 an hour on Long Island and in Westchester County, up from a statewide minimum of $9 an hour in 2016. And while business owners are only required to provide raises to employees whose pay does not meet the new minimum, many will offer raises to higher-earning employees as well, experts have said.

“If you have people on your staff who have more responsibilities or who produce more and are already making the minimum, you’re going to need to give them raises, too,” said Thomas Shinick, adjunct management and marketing professor at Adelphi University.

Minimum wages elsewhere in the state are also going up. The minimum will rise to $11 in New York City ($10.50 for companies with 10 or fewer employees), and $9.70 for the rest of the state. It will continue to rise toward a statewide minimum wage of $15 an hour. Long Island will hit $15 in 2021, and New York City in 2018.

“It’s not like we’re all going to wake up tomorrow and the minimum wage is going to be $15; it’s phased in and gradual and gives business owners the opportunity to adjust,” Shinick said.

“In the short term, the immediate effect will be very positive because it will put more money in people’s pockets, but long term, I don’t think it will have a major effect,” as the cost of goods, taxes and health benefits rise, he said.

However, Shinick warned the wage increase will provoke a “substantial” rise in competition for entry-level jobs for which productivity will be key.

“Employers can be more selective now,” he said.

“They might say to themselves, ‘If I have to pay more per hour for each worker I need to hire the most productive ones.’ If you have marginal employees and have to pay them more . . . that’s going to be a problem.”

Employees at or close to the minimum wage said they were looking forward to the increase.

Ashley Maucelli, 23, a single mother from Holbrook, has been working 30 hours a week as a line cook at a Panera Bread in Ronkonkoma for the past three months at $10 an hour. She said she has been told she will get a raise of up to 50 cents on Dec. 31.

“Working on minimum wage or just like a dollar or two above it and trying to have your own apartment, utilities, phone, gas and food on Long Island is impossible!” she said. “It’s crazy! It’s not enough to survive off of.”

Maucelli said even with help from her parents, whom she lives with and who take care of her 2-year-old daughter, paying bills is a struggle.

“I absolutely believe this raise is necessary,” Maucelli said.

But the minimum wage increase will hurt local farms, said Karl Novak, 59, president of the Long Island Farm Bureau and general manager of Half Hollow Nursery in Laurel. He has worked in agriculture for more than 30 years, and managed the nursery for five.

The raise “will put us [farmers] at a competitive disadvantage with surrounding states,” he said.

“At $10 an hour, our labor costs are increased by 11 percent. And we really have a hard time raising prices. We could probably raise prices only 1 or 2 percent. But we may not be able to increase prices at all depending on what the market can bear.”

Novak, who said about 80 people are employed full-time at Half Hollow Nursery from March to December, said the “minimum wage was not meant to be a living wage.”

Even so, he said that because wages at the nursery are “commensurate with tenure and skill set,” overall average hourly wages paid at Half Hollow are “much higher than the minimum with only entry-level, first-year employees paid minimum wage.” But any increase to the minimum pushes all hourly wages higher, he said.

“The ability for people to make a decent profit and living on Long Island in farming is in question,” Novak said. “This is an incentive to not farm anymore . . . all you have to do is drive down to the North Fork and see all the ‘for sale’ signs to find out many people have given up.”

Cullen Burnell, deputy communications director at the New York State Department of Labor, said businesses that fail to pay employees minimum wage will be investigated and face penalties.

Webinars and seminars covering basic information regarding the minimum wage — rights and responsibilities under the law for workers and employees based on industry and region — are available upon request at the New York Department of Labor’s website.

With Michael Gormley

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