ABA to NY Governor: Give Indies a Voice in Minimum Wage Discussions

With New York Gov. Andrew Cuomo declaring earlier this month that he wants to increase the state’s minimum wage to $15 from $8.75, the American Booksellers Association has asked the governor to include independent booksellers in any discussions regarding how the minimum wage is increased.

In a letter to the governor dated September 28, ABA CEO Oren Teicher stressed that indies do not oppose increasing the minimum wage, but, he said, “Our members in the state want to work with your office to help craft a solution that raises wages based upon sound economic principles.”

Teicher noted: “If the state raises the minimum wage without including New York’s independent bookstore owners in important policy discussions, they risk harming the people they are seeking to help by forcing independent businesses, which work on very small margins, to cut benefits or staff hours — or worse, to go out of business.”

On September 10, Gov. Cuomo announced that New York State Commissioner of Labor Mario Musolino had accepted the New York State Fast Food Wage Board’s recommendation that fast food workers’ wages be increased to $15 per hour as of December 31, 2018. The governor then proposed that the state raise the minimum wage for all workers to $15. Cuomo wants the new minimum wage phased in over time, with the $15 per hour wage going into effect as of July 1, 2021. New York State’s minimum wage is already set to increase to $9 as of December 31, 2015.

“We will phase in the wage so businesses can plan accordingly,” Cuomo said in his announcement. “We have heard and we reject the political argument that has been made that raising the minimum wage will cost jobs — we believe the exact opposite. We believe that raising the minimum wage is actually going to spur the economy, because the families that get that money are going to spend that money.” Cuomo stressed that “every working man and woman in the state of New York deserves $15 an hour.”

Cuomo plans to introduce a minimum wage bill in the state legislature, according to the Associated Press.

In the letter to Gov. Cuomo, Teicher stressed that independent bookstores do not have the same price flexibility that other retailers may have. “[T]hey are competing against online retailers that heavily discount and often fail to collect sales tax,” he said. “And, in the book business, the manufacturer (the publisher) prints a suggested retail price on the product — making it virtually impossible to add a surcharge to cover an increase in wages. Furthermore, many successful indie bookstores generally see a net profit of approximately two percent or less.”

Teicher also noted in his letter that “there are many ways government can support independent retailers to ensure that they can afford a minimum wage increase,” including offering tax or other incentives for landlords to rent space to local retailers and reducing fees and taxes for indie retailers.

Teicher’s letter can be read in full below.

September 28, 2015

The Honorable Andrew M. Cuomo
Governor of New York State
NYS State Capitol Building
Albany, NY 12224

Dear Governor Cuomo:

I am writing on behalf of the American Booksellers Association, the national not-for-profit trade association of independent bookstores, based in White Plains, New York, in regards to your plan to increase the minimum wage in New York State. The question of increasing the minimum wage is an important one, for both workers and small business owners, and it is our hope that the American Booksellers Association can work with your office to include input from indie retailers, such as booksellers, in any discussions on how the minimum wage is increased in the state.

Currently, most of our members pay their employees more than the minimum wage. If the state raises the minimum wage without including New York’s independent bookstore owners in important policy discussions, they risk harming the people they are seeking to help by forcing independent businesses, which work on very small margins, to cut benefits or staff hours — or worse, to go out of business.

Independent booksellers have little price flexibility, and they are competing against online retailers that heavily discount and often fail to collect sales tax. And, in the book business, the manufacturer (the publisher) prints a suggested retail price on the product — making it virtually impossible to add a surcharge to cover an increase in wages.

Furthermore, many successful indie bookstores generally see a net profit of approximately two percent or less. With margins this tight, it is important to understand that a small change can have a very big effect on profitability. When the minimum wage is raised, it inevitably means indies will have to increase the wages of senior and full-time staff in addition to increasing the wages of any minimum-wage workers. A seemingly “insignificant” wage increase can have a dramatic effect on the bottom line, sending a profitable store into the red.

To be clear, we do not oppose increasing the minimum wage. Our members in the state want to work with your office to help craft a solution that raises wages based upon sound economic principles. An independent bookstore has a much better chance of accommodating a gradual wage increase that occurs over a few years than a drastic wage increase that occurs in one.

Importantly, we believe a carefully executed minimum wage increase is more successful if planned in conjunction with concrete steps to support independent Main Street businesses. The critical role of independent retailers to the fiscal health of their communities cannot be overstated. Since 2002, a number of studies have documented the positive economic impact of locally owned businesses and their significantly greater economic return to the local economy than that of retail chains, big box stores, and remote online retailers. Supporting independents strengthens communities — and their workers.

There are many ways government can support independent retailers to ensure that they can afford a minimum wage increase. Cities can organize and sponsor events highlighting the importance of shopping locally (for example, a Shop Local Day). They can provide tax or other incentives for landlords to rent space to local retailers, and they can reduce fees and/or taxes for indie retailers to help them pay a higher wage to their employees.

Governor Cuomo, I’d love the opportunity to meet with you or your staff at your convenience to discuss this important matter.

Thank you for your consideration.

Sincerely,

Oren Teicher, CEO
American Booksellers Association