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Rising labor costs affect local businesses

The continuously rising costs of running a business are taking a toll on some small, local businesses.

Posted: Dec 31, 2018 6:28 PM

UTICA -- The continuously rising costs of running a business are taking a toll on some small, local businesses.

Minimum wage is increasing to $11.10 an hour starting December 31 and is one financial burden that small businesses face. While increasing wages can be good for employees, small business owners are struggling to keep up with rising business expenses.
Michael Brown owns Joey's Restaurant & Pizzeria in Utica. Joey's is closing its doors after 15 years in business partially due to financial burdens.

“With minimum wage going up again, what happens then is that food costs go up, insurance goes up, taxes goes up,” said Brown. “Everything keeps going up. So it just made it unfeasible to continue to sustain the restaurant.”
Douglas Allen-Leonard, owner of Bite Cafe in Utica, says rising labor costs are like a domino effect that causes a spike in other business costs.

“There’s other factors that go into that. Your worker's comp goes up as well and we have to look at the bottom line and we have to factor that into our menu pricing because there’s a calculation that we do when we calculate out a sandwich or a breakfast …”

Minimum wage will continue to rise over the next two years. Something business owners say could have negative effects on small businesses.

“When you have to compete against these bigger corporations that have the ability to carry multiple employees, it just makes it harder,” Brown said. “And these kids today, they see that they can go make the money somewhere else and working in a mom and pop place, you’re probably expected to do more because there are fewer employees.”

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