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Surveys: Factories feeling impact of minimum wage increases

A Federal Reserve survey looked at the effect

A Federal Reserve survey looked at the effect of minimum wage increases on different business sectors in the state.

Factories are feeling the impact of New York State’s higher minimum wage more than retailers and other service firms, according to two polls released this week.

The Federal Reserve Bank of New York found 22 percent of manufacturers statewide said the latest incremental increase in hourly minimum pay is having a “significant effect” on their decision-making. Only 13.5 percent of service firms in the metropolitan area, including retailers, said the wage hike was impacting them significantly.

In separate polls this month, the bank canvassed about 100 plants across the state and about 100 service firms on Long Island and in New York City and its northern suburbs.

In 2016 Gov. Andrew M. Cuomo and the State Legislature adopted an ambitious 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 and 2018. It will reach $15 in December 2021.

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

The number of factories saying the new minimum wage is having a "significant effect" on them has climbed 5 percentage points since a New York Fed poll in April 2018. The year-over-year rise among service firms is more modest, up 3.5 percentage points.

Nearly 60 percent of service firms said they have not been affected by the increase in minimum pay compared with 36 percent of manufacturers. 

"New York businesses were queried on what share of their workforce saw a larger wage rise 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 18 percent among manufacturers and 11 percent among service firms."

The impact on factories of increasing the state's minimum wage wasn't discussed much in the state Capitol in 2016. The debate mainly focused on farms, retailers and other service businesses, where a majority of employees earn the minimum wage.

Proponents of a wage hike said that raising pay would boost the economy because workers would spend more locally. Opponents said increasing the minimum wage would cost jobs.

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