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Service firms feeling bigger impact from minimum wage hike, poll says

Veronica Ramos of Uniondale, right, a McDonald's manager,

Veronica Ramos of Uniondale, right, a McDonald's manager, rallies with supporters of raising fast-food workers' wages at Nassau Community College in Garden City in 2015. Credit: Barry Sloan

Retailers and other service firms are feeling a greater impact of New York State’s higher minimum wage than they did two years ago, according to two polls released this week.

The Federal Reserve Bank of New York found 16% of service firms in the state said the latest incremental increase in hourly minimum pay is having a “significant effect” on their decision-making. Only 9.6% of service firms said that in 2018, when the wage rate also went up by $1 per hour.

In a separate bank poll, 18% of factory owners statewide said the latest increase in the state’s minimum wage is having a “significant effect” on them. Two years ago, 17.1% had that reaction to the pay hike.

The New York Fed this month canvassed about 125 plants and about 150 service firms across the state.

In this month's polls, nearly 61% of service firms said they have not been affected by the increase in minimum pay compared with 41% percent of manufacturers.

In 2016 Gov. Andrew M. Cuomo and the State Legislature adopted a plan to raise the state's minimum wage from $9 per hour to $15 over several years.

In Nassau, Suffolk and Westchester counties, the wage rate rose from $9 to $10 per hour on Dec. 31, 2016, and rose by another dollar at the end of 2017, 2018 and 2019. It will reach $15 in December 2021.

The yearly increases have been larger in New York City and smaller upstate.

“Businesses were also queried on what share of their workforce saw a larger wage raise than they otherwise would have as a result of the latest minimum wage hike,” the bank said in a statement. “The average reported share was 20% among manufacturers — up a bit from last year’s survey —  and 10% among service firms — down slightly from last year.”

The polls’ release comes two months after Cuomo’s budget division said the gradual phase-in of the $15-per-hour minimum wage has had a “negligible” impact on the labor market. The division, in a required report, said the wage rise should continue unabated.

CORRECTION: The New York Fed survey of retailers and service firms covered New York State. An earlier version of this story incorrectly described the geography the survey encompassed.

MAXIMUM IMPACT OF WAGE HIKE

The Federal Reserve Bank of New York found more retailers and service firms are feeling a greater impact from a rise in the state's minimum wage than they did two years ago. The percentage saying the wage hike is having a "significant effect" on their business:

2020: 16%

2019: 13.5%

2018: 9.6%

SOURCE: Poll of 150 retailers and service firms in New York State conducted in February by the Federal Reserve Bank of New York

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