NYC’s minimum wage increase may lead to a business exodus

New York City business owners may soon take a hike — to neighboring towns in New Jersey and Connecticut, where labor costs now look much more attractive, say labor experts.

By Jan. 1, New York City will officially hike the minimum hourly wage from $13 to $15 for businesses with 11 or more employees, compared with a statewide increase of 25 cents in New Jersey to account for inflation.

And as New Jersey’s new minimum rate notches in at $8.85, or 41 percent lower than the Big Apple’s, Connecticut is standing pat at $10.10 hourly.

“New York City is raising the minimum at the same time as we hear of an increasing number of stores closing in New York City,” said Michael Saltsman, research director at the Employment Policies Institute, noting how many of these enterprises offered “gateway” jobs in low-wage sectors. Those were a step toward higher pay later for workers who gained experience and more education.

The prospect of businesses avoiding the Big Apple, or moving from New York City to lower-paying New Jersey and Connecticut, is gaining momentum as the clock ticks toward the New Year.

“Another New Year comes with another mandated wage increase in New York City that small businesses will have to figure out how to manage,” said Andrew Rigie, executive director of the New York City Hospitality Alliance, summing up sentiment among many of his fellow members in the service sectors. “Let’s hope consumers are willing to pay the higher prices needed to offset the mandate.”

All told, come Dec. 31 or Jan. 1, 20 states and 23 localities nationwide will hike the minimum wage. The increases will have various iterations in New York state, such as a jump to $13.50 in New York City for employers with 10 or fewer employees; $12 in Nassau, Suffolk and Westchester counties, and $11.10 hourly in the rest of the state.