OLEAN, N.Y. — The New York state minimum wage officially increased to $9.70 an hour over the weekend. While that’s good news for those receiving a pay bump, local business owners said they’ll get creative to pay the higher wages, which could mean less new hires, reducing hours for staff and even raising some prices.
The state’s minimum wage increased from $9 an hour, and will increase 70 cents each year on New Year’s Eve until 2020 as part of a state law passed last year to eventually make minimum wage $15 an hour. Hourly wages for fast food workers increased to $10.75 as well Saturday, while tipped workers will remain at $7.50. Twenty states nationwide will increase their minimum wage at the start of 2017.
Jason Shaner, manager of Park & Shop, said about a third of the staff earns minimum wage and that the store had already increased some of its staff’s hourly wages before Saturday. He said the hikes will force the grocery store to raise prices in some areas.
“When people think of raising minimum wage, they think that money just appears from nowhere, but it has to come from somewhere and it just gets passed on to the consumer,” he said. “At the same time you can’t raise them too much because the economy in Olean is very weak right now. … We’ll do it as reasonable we can. We’re not going to gouge people by any means, but there’s only so much cutting you can do.”
David Ried, owner of Ried’s Food Barn, said he’ll see what the competition does before raising any prices, saying he wants to keep customers happy and watch his competitors’ prices.
He said the store will either need to increase some prices or get more productivity out of the workers it already has in order to pay the higher wages. He noted the increased minimum wage could lead to customers affording more food, but they’ll have to see if that turns out to be the case.
Before Saturday, Reid’s was able to pay all of its employees more than the state minimum wage with a starting hourly wage of $9.15. With the grocery store’s starting wage at $9.70 an hour, he said 95 percent of the staff is and will continue to be paid more than the state minimum.
Tom Palumbo, co-owner of The Sports Locker, said the increase only affected the wages of about five part-time employees, as the other approximately 25 store employees are full-time and were already making more than $9.70 an hour.
The increase does, however, mean Palumbo will have to reduce hours for his current part-time staff and perhaps hire less part-time employees in the future.
“Younger kids that are looking for a part-time position while they’re going to school … it will affect them because I can’t hire as many of them because I just can’t put that many people on the payroll making that kind of money,” he said.
Shaner said most of Park & Shop’s minimum wage employees are teenagers working after-school jobs, though he noted some high schoolers have become supervisors and received raises. While he likes the idea of increasing the minimum wage for adults, he thinks there should be special provisions for teenagers.
“When there’s somebody that’s on their own and they have living expenses, it’s only fair that they be able to make a living wage,” he said. “But I wish that Congress would come up with a different scenario so far as when it comes to hiring young kids, when it’s their first job and they have no experience.”
He said whether or not a business is negatively impacted by increasing wages will depend on the kind the business.
“When you’re talking clothing, that has huge profit margins. And then when you get down to a grocery store — that literally comes down to a fine line of whether or not you make any money for that year — that’s when minimum wage can really hurt a business,” he said.
Still, Shaner said Park & Shop, which has locations in Olean and Portville, will be just fine. He noted the owners, the Mahar family, have been in the grocery business for about 90 years.
“This is just the same old thing. It’s just a part of doing business,” he said. “You adjust and you adapt. So we’ll keep doing it and we’ll keep surviving — that’s what we’ve done all these years and we’ll continue to do it.”
Both Ried and Palumbo also said their businesses will adjust to whatever wage increases are handed down from the state.
Palumbo said The Sports Locker isn’t thinking about the minimum wage eventually reaching $15 an hour — it’s thinking about the next sale. Ried, who first opened Ried’s Food Barn in 1974, said his store will stay focused on its customers and leave anything else in the background.
“I’m not afraid of it. I’ve been down this road too many times,” Reid said. “Our customers will help us find a way.”
