Ahead Of Primaries, It’s Taxes And Some Shrugs In NY

New York’s primary is today and the stakes are high. This time around there is enough political drama to make the 291 Democratic delegates and the 95 Republican delegates a contest filled by sharp elbows.

Unless you’ve been living under a rock, or binge-watching “Game of Thrones” to catch up on things before the new season begins, you know that Donald Trump is eyeing a continued march toward a (hopefully for him) uncontested Republican convention this summer.

In a different contest across the aisle, Bernie Sanders wants to push his (perhaps uphill and no pun intended) battle against Hillary Clinton a bit further along.

And while a lot of the “color” surrounding press coverage of the primary may center on which of the candidates (oh, yes, Kasich and Cruz are still there too) are more quintessentially “New York” than the others, here at PYMNTS we take a different tack than debating (or expending digital ink) on who handles the dreaded “subway card swipe” with aplomb.

The next president will have to grapple with far weightier tasks, among them sustaining job growth where it has been flowering and planting the seeds where the labor market has been barren.

That of course applies to small businesses, which are a rich source of job creation, and which have three engines, as measured by our proprietary Store Front Business Index – wage growth, employee growth (hiring trends) and actual establishment of new businesses.

The numbers, at least for New York – and not just the city, as it should be remembered that the primary reaches beyond the Big Apple – are uneven, at best. Breaking down growth by component, the overall, nationwide Index as tabulated by our research, grew faster than New York — much faster, at 3.7 percent through the second quarter of last year versus 1.7 percent.

Employment growth showed the most glaring disparity, at 3.1 percent vs. New York’s 1.3 percent, and real wages at nearly 5 percent compared to the state’s roughly 3 percent.

In the City that Never Sleeps, and the boroughs that toss and turn, what keeps business owners up at night? Moving through the steel canyons of the city itself and in Long Island, we found bemused smiles in answer to questions about main concerns headed into primary day, and of course, the general election. Many did not want to talk about the particulars of their businesses on the record.

Worries? “Taxes,” said one pizza shop owner near Penn Station, who asked that neither he nor his shop be named. “Rent. I spend time talking to you, I don’t make pies — and I don’t make the money to pay taxes. Or rent.” In this environment, time is money, and talk is too cheap a return to warrant time.

One liquor store owner on Madison Avenue, less than glitzy: “People will still drink, and rent will still be high, no matter who wins.”

And yet: Down a series of flights of stairs, in search of a mom and pop that truly occupies a niche, on 45th Street and well beyond: Allan Spitz, owner of the Red Caboose, a hobby shop that must hold every part, kit, and fully assembled offering of the proverbial planes, trains and automobile known to man. No Thomas the Train knockoffs here – these are the real McCoy, steel and iron (and OK, lots of plastic) stretching back over decades and fetching hundreds of dollars.

Spitz is happy to wax effusive over the challenges facing a small business owner where the new millennium is already in the rearview mirror (and even as customers, middle aged and older mull the artifacts of their youths and basements). For starters, his staff back in the heyday of models and collecting, only a few decades ago (the shop has been here since the mid-1990s, and as many as five hobby shops were on the same block whereas now there is only Spitz’s) is one-part timer and himself. It used to be more than 10. Then there’s the sales, which peaked at more than a million dollars annually and now is down to roughly $400,000 per year.

Given the shop’s location, and proximity to Times Square, and its line of business, Spitz maintains that tourism is the lifeblood of his cash flow – and among those, Brazilian and Canadian customers are the ones who wander in most frequently. “Roughly 50 percent of my business comes from tourism,” he said. So the strength of the dollar is at times a concern.”

“We fly one flag here,” he says, showing a visitor a stick mounted Brazilian flag.

As for the election, “the worst crime is hypocrisy and not taxes,” he adds, positing that the Republicans, ordinarily the champion of small business, and business in general, have in fact not been all that staunchly pro-business in practice. (Social and other issues have got him rooting for, and intending to vote for, Hillary.) He promptly brandishes a page torn from a magazine from the National Retail Federation, advocating fairness on Internet sales taxes, which has, according to some merchants, hit brick-and-mortar locations.

Technology? Clipboards abound, and so does internal human memory, and pens. But yes, indeed, there is a brand new chip card reader, tucked neatly away, and ready to do business.

About 40 minutes by train later, into Long Island. “They call me Dr. Phil,” says Phil, pizza maker at a shop not named Phil’s but Gino’s, in Lynbrook, a town once bustling, but now decidedly less so. “The system is the system,” he said, which has led to an inclination to vote, but he shares, along with his fellow worker (and owner) a concern about taxes, and the fact that “the 1 percent” have got more than, well, anyone else.

At a computer shop, just several doors down, Anis, who came here from India last year, watches the election with interest. “It’s taxes that weigh on everything. It’s job opportunities; [foot] traffic.” And as for the primaries, if he were doing the choosing, it’d be Sanders or Trump.


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