Thursday, January 18, 2018

45 years of business: New York hasn’t made it easy

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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