Long Island businesses worry over absorbing minimum wage increases

As local businesses adjust to Long Island’s new $16 minimum wage, some employers said they are concerned about the impact increased labor costs are having on their ability to compete in an already high-priced business environment.

Early last week, the minimum wage for the Island, New York City and Westchester increased from $15 to $16 per hour. Additional increases of 50 cents are scheduled in both 2025 and 2026. After reaching $17, the minimum will be tied to inflation and will increase at yet-to-be determined intervals starting in 2027.

Local business owners said they are concerned over their ability to operate profitably and compete with businesses outside the state.

Jack Wilson, president of Latinfood US Corp. of Bohemia, a wholesaler and importer of perishable goods and foods from Latin America, said the increase makes his business less competitive.

“The costs of running a business here on Long Island is increasing to the point where it’s almost pricing us out of the marketplace,” said Wilson, who employs around 22 workers at his facility. “I compete with businesses that are based in Pennsylvania. That puts me at a great disadvantage.” Pennsylvania's minimum matches the federal one, $7.25 per hour.

Wilson, who employs mostly warehouse and transportation workers, said the wage increases not only impact his payroll directly, but that third-party services his business uses have also increased their prices to cover higher wages.

“Every time I call a mechanic, every time I take my trucks in for maintenance, all those higher costs are compounded,” he said. “The overall costs of running my business are significantly higher than in other places.”

As a result, he said he often finds himself having to eat costs to stay competitive, or face losing sales opportunities to companies in states with a lower minimum wage.

“It’s happened a few times where my prices are somewhere between 15% to 20% higher only because of the costs of labor because of being here on Long Island,” Wilson said. 

Dorothy Roberts, president of the Long Island Hospitality Association, said while many hospitality employers have already phased in the higher minimum wage, “It’s always a concern when it’s something that’s mandated on your business.”

With the industry hit hard by early pandemic closures and a reduction in tourism, businesses in the sector are only now starting to get back on their feet, she said.

“The hospitality industry was decimated during COVID and even a year after,” Roberts said. “We still consider 2022 a recovery year, making 2023 really the first year we’ve made some profit.”

Noreen Carro, owner of LMN Printing of NY Inc., said she understands the need for working Islanders to make more at a time of high prices, but said the wage increases hurt small businesses the most.

“Eight years ago, the minimum wage was about $10 an hour. Then it went up gradually,” Carro said. “Not to say it shouldn’t go up because everything goes up. But is it fair that it goes to $16? I just think that’s not reasonable.”

Carro, whose commercial printing services business employs about six workers, said it's harder to compete not only with out-of-state businesses, but globally.

Carro said the state should do more to help small businesses afford the higher labor costs it’s mandating.

“Who’s going to turn around and help me?” Carro said.

Some business groups, however, said the increases represent an opportunity to boost consumer spending at small businesses on the Island.

Luis Vazquez, president of the Long Island Hispanic Chamber of Commerce, said the increase to $16 is “a positive beginning to bridging the wage disparities that exist, and the higher wage would mean a reduction in economic disparities in our Hispanic, underserved community.”

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“Our recommendation is for federal, state and local governments to increase funding to support small businesses to offset the economic burden that they may have as a result of the minimum wage increase,” he said in an email.

'Expensive places to live'

Mary Anne Trasciatti, director of labor studies at Hofstra University, said wage increases have been a necessity for lower-income workers for years predating the pandemic, and the same remains true now.

“Long Island, New York City, Westchester, these are very expensive places to live,” she said.

“Although it might hit some smaller businesses hard, the truth is people are really struggling to survive on these minimum wage jobs,” Trasciatti said.

She said employers should be pushing the federal government to raise the nation’s $7.25 minimum wage to even the playing field.

Small business owners “shouldn’t be penalized for being in New York, but the federal government needs to step up.”

Phil Andrews, president of the Long Island African American Chamber of Commerce, said he’s in favor of the increases.

“If you don’t pay people a decent wage, you’re going to have more turnover,” Andrews said. “I think businesses know there’s a shortage of talent.”

Andrews is a member of The New York Business for a Fair Minimum Wage Coalition, a group made up of over 300 businesses and business organizations statewide that advocated for an even bigger increase in the state minimum wage.

Joe Fiorini, co-owner of Fiorini Landscape & Snow Removal, employs over 40 workers at $17 to $25 an hour during the busy summer months at his Melville-based, family-run enterprise.

Fiorini, like Wilson and Carro, said he agrees that raises are a necessity.

“As a business owner, I see where they’re coming from because the cost of living is going up,” he said.

At the same time, Fiorini said increases have to come from somewhere.

“Obviously, it hurts the business and I hope the clientele understand that it all comes around,” he said. “Someone has to pay for it.”