by Todd Tesman, Owner of Tesman’s Service Station in Upstate New York
As we progress through the 2016 NY State budget process, the $15 minimum wage proposal is, in my eyes – the pivot point for our upstate economy.
Those of us that see reality in light of the propaganda strewn across our state from a union-provided bus known as the Andrew Cuomo Campaign for Economic Justice, can see this incredibly damaging progressive brainstorm will be the death of small businesses state wide.
Small businesses already struggling to simply keep their heads above water currently see revenues normally used to increase salaries have been completely absorbed to offset the ever increasing costs of health care coverage alone, rising by 12-16% annually and in 2013 bi-annually.
The worst part – The latest policy my small business now has and shares with our 5 full time technicians is abbreviated by our provider as a “POS Plan,” an appropriate abbreviation because that’s exactly what it is, a POS!
High premium, high deductible, high co-pay, yet all we can get our hands on to protect our employees.
I have been in business now for almost 35 years and each year the struggles continue to grow. The state of New York, rated dead last in business-friendliness, has a governor that is now threatening a final blow for those who refuse to relocate to a more friendly neighboring state. A $15 an hour minimum wage will not only kill jobs but entire businesses, from health care providers to lawn care providers. Agriculture and farming industry will bear the largest hit with food service providers right behind.
My business is the automotive repair industry and our challenges have been enormous with major technology advances in the auto industry. Annual software upgrades are twice what basic equipment replacement costs are, with no end in sight. A minimum wage increase of this magnitude will absolutely negatively impact my operation.
Currently, all of my current staff is above the proposed minimum wage, but we will be impacted indirectly as our parts deliveries will be cut by 30% meaning longer customer waiting and loss of productivity. Parts and supplies costs will increase, inventories will decrease and ultimately our hourly rate will rise.
It breaks my heart but for the last seven years we have made all the cuts possible to lessen the burden on our incredibly loyal customer base and our staff with the patience of saints. There is only one option left, and as usual the working class will pay the price.
A quick story of another loss that no one seems to see, is a young kid who works down in back. A father came in one day and asked a favor.
“Do you have anything for my kid over the summer to keep him out of trouble?” he asked.
I reply, “OK, send him up and we will interview him.”
He’s a good kid – Had to pull up his pants, take his hat off, comb his hair and show up on time for his interview, not knowing his father was in earlier. He passed his first test and/or lesson in entering the work force and I hired him at $10 per hour as he did have “some” experience working with tools. I took my best tech and said “take this kid and teach him how to work” which removes him from a productivity level, a cost no one considers. The kid learned quick, was polite and on time – A simple gesture has become an investment to our community.
The following summer guess who’s back. The kid wants another summer job so I hire him again. This year, it’s $12 an hour because he had learned quickly and forgot very little. Took the same tech and said “pick up where you left off.” Another investment in the community and gave a kid down in back an opportunity to test drive a skill that later turned into a career.
So now the “kid down in back” who struggled through our public school system, took the advice and the initiative to attend a 2 year automotive program at our local Hudson Valley Community College. He worked at my shop part time while finishing the automotive program. A few months after graduating, he didn’t stay with us but rather, went to work for a neighboring business in our area to repair and service heavy equipment. His passion.
My point is at minimum wage, business owners can take gambles, invest valuable time and resources in “the kid down back” and have no regrets in doing so. Yes there were costs. The technician taken from the productivity line and moved to train an entry level, untrained, unskilled young adult with no clue where his future will be and left for employment elsewhere 6 months later. A significant cost no one considers but an investment in my community worth every penny invested!
That is another simple example of what small business owners can do … but not at a $15 minimum wage.