Local businesses are facing reality of increasing wages
Dearth of employees following pandemic provides the momentum to boost pay
Earlier this month Schuyler Bull, the owner of Fort Orange General Store located downtown, increased wages for his employees from $12.75 — slightly above the state’s required minimum wage of $12.50 — to $14 an hour.
His four-year-old business didn’t just survive the pandemic but succeeded financially and he wanted to raise wages to reward his employees for their hard work over the difficult year. He knew the time to do it was now, as businesses across the country are struggling to hire workers and the threat of not retaining current employees and not attracting new ones seems to loom larger as the weeks stretch on.
Though he was hoping to raise the wage to as close to $15 an hour as possible, after looking at the impact the increased wage would have to his store’s bottom line, he decided $14 was a “much more doable number,” Bull said.
“It is tough being a small business. Every penny counts,” Bull said. “We are kind of betting on the continued support from our customer base to keep this (wage) up for employees. But looking over everything,
I’m confident (customer support will continue).”
As the pandemic recedes and the economy reopens, businesses across the country are struggling to hire and retain employees. At first, local businesses tried job fairs to attract employees, but as businesses start to get more desperate, many are considering increasing their wages.
Smaller businesses struggle in particular because they don’t always have access to the research and data to understand where their wages should be at, said Claudine Zachara, president and COO of Thinkwhy, which recently created a product called Labor IQ which aims to help businesses to understand what a competitive total compensation package should be for an employee in their industry.
“We are seeing an unprecedented period right now in history,” Zachara said. “Work for all of us has changed in terms of thinking how we work and why we work. We went into PRE-COVID days in one of the tightest labor markets in U.S. history ... interesting enough, though depending on the in
“Different workers have different needs. For some of them the real barrier is not money, it is not the low wage, but it is the schedule. For many workers health insurance is a huge need. They will take a lower wage job so their family can have health insurance.” — Ian Greer, economist at Cornell University’s School of Industrial and Labor Relations
dustry and part of country you are in you might be in an even worse situation.”
Albany’s wages are increasing right now slightly faster than a similar metro area like Buffalo, according to Thinkwhy labor market data.
The state’s Division of the Budget projects wages will increase by just more than 5 percent, while predicting that personal income will decrease once federal assistance stops later this fall.
Alex Berta, the owner of Bombers Burrito and the new Wizard Burger, has always paid his employees $18 an hour. But it comes with a cost. “I make no money,” Berta said.
“When I first opened Bombers Burrito I was thinking $17 an hour but then I read somewhere that $17 is just the living wage (in Albany). $18 an hour felt it would be more aggressive, more encouraging for people to want to come work here,” Berta said.
The living wage in Albany for an adult with no children is $15.12 an hour. If an adult has one child, the living wage jumps up to $32.29, according to MIT’S Living Wage Calculator.
Berta hasn’t had any difficulty filling positions, and only wishes he had more openings so he could hire more people.
Other major employers haven’t increased wages but have plumped up their sign-on bonuses. Fritolay, which employs approximately 105 people at their Clifton Park facility, has implemented sign-on bonuses between $500 to $1,500, according to a spokesperson for the company.
Global Foundries currently has about 100 job openings, mainly technicians and engineering jobs, and that number has been increasing in the last couple of months as the company is growing, said Jordan Steller, the senior director of human resources at the company.
The company has not increased wages in the last couple of weeks, but increases are discussed on an annual, if not more often, basis, Steller said.
“We are always trying to make sure our wages are competitive,” Steller said. “We are getting candidates, maybe not as many as we’d like to fill all the positions right now, but we are seeing lots of interest in the jobs.”
Stewart’s Shops hourly rate is $15.10 an hour, as well as a benefits package including employee stock ownership, health care, paid maternity leave, paid vacation, and YMCA child care discounts and scholarships for the dependents of employees, according to Erica Komoroske, the spokeswoman for the company.
“A total compensation package to win talent is key,” Zachara said. A total package is not just about health insurance. It can include wages, work from home status, flexibility, benefits, and sign on bonuses, Zachara said.
“Different workers have different needs,” said economist Ian Greer at Cornell University’s School of Industrial and Labor Relations. “For some of them the real barrier is not money, it is not the low wage, but it is the schedule. For many workers health insurance is a huge need. They will take a lower wage job so their family can have health insurance.”
For Greer, increasing wages is the only just way out of the pandemic. “The labor market before the pandemic was extremely unequal,” Greer said.
Greer is working on research about new ways companies can tweak their business model to fund pay increases besides increasing their prices.
“Increasing prices is a thing people and employers worry about the most. They are reluctant to do that because they worry about losing customers,” Greer said.
Businesses can introduce technology to be more efficient, create new goods and services, and create new market niches to make more money, Greer said.
“In a way it’s a really exciting time because employers who aren’t offering high quality jobs are really struggling to recruit and attract workers...” Greer said. “This is forcing them to innovate.”