This week, Confer Plastics celebrates 45 years of
business. It’s been an exciting ride, one that has seen our company and people redefine
the industry, invent everyday items, and positively affect our coworkers,
customers, and community.
It hasn’t been easy. There have been 6 recessions
and 9 US Presidents over that time, all with their own impacts and nuances. On
top of that, competition has been tough – whether those foes have operated
domestically or abroad.
The hardest part of it all, though, as you may have
guessed from 13 years of this column, has been running a business in New York. It’s
been downright difficult to weather all those storms when it seems like state
officials have conspired against small businesses. Around here, we like to say
that our success is despite – or in spite of – Albany.
When my father and late-grandfather opened shop in
1973, it was the Golden Age of manufacturing locally. North Tonawanda,
Tonawanda and Niagara Falls were hot beds, with factories and machine shops employing
thousands in production and the skilled trades.
But, a lot can change in 45 years. Drive down River
Road or Buffalo Avenue in the Falls and you’ll see that with brownfields,
shuttered plants, and the faded memories of countless men and women punching a
time clock and making things.
Where did they all go?
Some business died while many more set-up shop in greener
pastures. For some industries it might have been somewhere in the States, like the
Carolinas, Indiana, or Tennessee. For
others, it could have been foreign locales like China or Mexico.
That mass exodus of manufacturers was an outcome of
New York’s ever-growing cost of doing business. Not a State of the State goes
by without a call for new revenue sources or new ways to regulate the
day-to-activities of the Empire State’s productive sectors.
They add up. Boy, do they ever!
If I look at cost factors that are directly
impacted by Albany – such as electricity, various forms of insurance, and
property taxes – my company pays $750,000 more (every single year) for those
items than do our competitors from other states.
While $750,000 is a lot, it might not represent my
team’s entire competitive impasse. I never really included the cost of labor in
that equation because it’s never been an issue – until recently. Once New York
started ramping up the minimum wage rate dramatically, it impacted us.
We don’t pay the minimum wage; we’ve always started
off our entry level personnel well above that rate, ensuring we get the best
job candidates. But as the minimum wage rose, we had to move that gap
accordingly. But, we also have had to pay all who work for us (from the least
experienced to the most experienced) an equal increase so as not to create a
disenfranchised workforce -- we can’t reward those just starting while ignoring
the others who helped get us to where we are.
By doing so, I have to assume that beyond what
would have been regularly-scheduled, incremental wage increases of our own
decision, we are being forced to add $500,000 to $650,000 to the cost of labor every
year versus that which states with lower minimum wages would have to shell out.
That competitive disadvantage will exist until other states’ minimum wages
change…if they do.
So, our consistent $750,000 burden all of sudden is
looking like more than $1.25 million.
That’s an almost unbelievable and insurmountable burden
to doing business in the Empire State, especially given the fact that we are
competing against manufacturers from around the globe. In a business world
where purchasing managers try to save every penny they can, our added cost is a
killer.
We could be bigger. We could have our bank loans
paid off. We could employ more people. Instead, we end up paying for the “privilege”
of doing business in New York rather than investing more in the company and our
people.
We’re just one company facing that situation. Many
more did. But they either withered or left. Many more are, and they, like us,
praise every day that they can turn on the lights and keep people employed.
I don’t care if someone is operating a factory, a
farm, a restaurant, a boutique, or a doctor’s office in New York. It’s not easy
for any of us.
There are the costs, then there are all the rules.
Just look at what 2018 has brought: Businesses are being saddled with the most
extravagant paid leave system in the country, they are likely looking at the
passage of some onerous employee scheduling rules, and there’s also the
potential of a huge headache in the form of a payroll tax.
But, we, just like the moms and pops, keep plugging
along, doing what we can to take on the competition even though the odds are
against us from the start, odds created by the very state that is supposed to
be looking out for the best interests of its economy and citizens.
It’s been a tough fight for 45 years, and, despite
those woes, I plan to have the Confer family and all the families that work
with us keep fighting for at least another 45.
From the 22
January 2018 Greater Niagara Newspapers and Batavia Daily News
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