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The minimum wage debate continues

As the NRF rallies the troops, a hardware store owner signs up for "Fair Minimum Wage"

The continuing debate over the minimum wage law is one that disproportionately affects retailers. That doesn't mean all retailers see it the same way.

Leadeing the charge against federal raises is the National Retail Federation. The advocacy group has published statement after statement urging Congress to stand down to the push for higher wages.

“Raising the standard of living for low-skill, low-wage workers is a valid goal,” NRF SVP for government relations David French said in a letter to the entire Senate. “But there is clear evidence that mandated wage hikes undermine the job prospects for less skilled and part-time workers.”

The way the NRF sees it, businesses are already contending with the challenges associated with the Affordable Care Act, and if there were ever a good time to mandate a federal wage increase, now is certainly not it.

“Policymakers have other tools, such as increasing the earned income tax credit, fixing the tax code, education improvements, immigration reform, transportation funding, and strong trade alliances that will aid in achieving that goal without creating more unemployment,” French wrote. “Finding more opportunities for those trying to start out is a better economic approach than restricting the amount of jobs for those seeking employment."

In retail circles, the feeling expressed by the NRF is widespread, but not unanimous. 

Gina Schaefer, the owner of nine Ace Hardware stores in the D.C. metro area took a stand at Capitol Hill in favor of raising the federal minimum wage. Schaefer spoke at an April 3 event with Harry Reid, Nancy Pelosi and several other members of Congress.

Schaefer was one of hundreds of business owners and organizations that have signed the Business For a Fair Minimum Wage Statement, which advocates for a minimum wage increase to $10.10 over three years and then adjusting it annually according to the rising cost of living. Adjusting for inflation, today's $7.25 minimum wage is a third less than it was in 1968, they argue.

“There’s a lot of business support for raising the minimum wage,” Schaefer said. “Paying fair wages helped our business grow fast from our first store in 2003 to nine stores and nearly 200 employees now. When employees earn a decent starting wage, they can concentrate on their job and our customers without continual stress over how they are going to afford basics like rent, groceries or transportation. Fair wages help us attract and retain good employees, increase sales, expand our business and hire more employees. Our employees shop at other businesses, and the employees of other businesses shop at our stores. It’s a win-win for workers and businesses,” she said.

(The HCN minimum wage poll shows variety of opinion on the federal minimum wage. Take the poll here.)

Paul Saginaw, owner of Zingerman's Deli and another member of Business for a Fair Minimum Wage, added, “We know from experience a minimum wage increase makes great sense for business. Since opening Zingerman’s Deli almost 32 years ago, we’ve grown to eight businesses employing 625 permanent staff with revenues just under $50 million dollars. Paying entry wages our employees can live on has been important for our profitability and our annual compounded growth rate of 10%. Raising the minimum wage would boost our communities and our economy.”

What we need to keep in mind

What we need to keep in mind is that it is all relative. Regards of what minimum wage is, it will never be enough. I remember the days when minimum wage was a little over a dollar and you could by a new Ford Maverick for $1,999.00. Depending on where you live the $7.25 minimum wage ($8.25 for IL) you can still by a new car of that quality, it will just cost you about $18,000.00 which is comparable in value to the early 1970’s. If we raised minimum wage to $10.00 an hour tomorrow, within two years everyone that thought the raise would solve all the problems will be hollering for an increase to a decent wage because the poverty level has risen to match the increase in minimum wage, what will it be then $20.00 and hour. Thinking about the $3.00 an hour increase on federal minimum wage will also send those who currently are making $10.00 an hour to their bosses demanding an increase as they fell they are worth more than that entry level employee and they are. So from a business stand point you are looking at an increase to every employee of at least three dollars an hour. Not to mention that $3.00 also carries a price tag to the business of about $1.00 an hour in additional cost of the employees to cover the increase in taxes and benefits. This is a cost of about $8,000.00 per employee per year. Most business can not shoulder that expense; therefore their prices must goes up. In turn the consumer ultimately pays these increases with their new pay increase. Thus inflation is reborn with a vengeance. For those who pay a decent wage and think your competitor should also, think about this, where could you find an easier location to steal away good employees and why haven’t you? Minimum wage could increase to a $100.00 and hour but a loaf of bread would cost $80.00 and everything would follow the increase. Try as we might we cannot solve everyone’s financial problems there will always be a poverty level. However, the more we increase the minimum wage the more money the government will have to waste. Why do you think they are pushing so hard to raise the minimum wage. If they were concerned about those not making a decent wage then why not eliminate the income taxes on those making minimum wage. The increase would come close to matching the minimum wage increase and businesses would not have to shoulder the burden. That will never happen!

I think it's great that Gina

I think it's great that Gina Schaefer & Paul Saginaw want to pay their workers more, and they have the money to do that - they should. They have high profit margins and can afford to do that great for them. However, the companies that can NOT and must compete with the Chinese .40 cents an hour and NO benefits can not survive and do that ! It doesn't give them the RIGHT to tell other companies how to run their business - because we have a FULL graveyard of companies out of business today and more going out tomorrow. Government needs to focus on more important things then minimum wage - business will take care of itself. Good skilled works will find jobs with higher wages on they OWN. If there are companies with their doors still open. NO company - NO job period ! If business doesn't success - then either will the country - period !!! Government go fix social security for the workers who you already took they money weather it was high or minimum wage.

I agree $7.25 is not a living

I agree $7.25 is not a living wage. But as a small business owner in a very small town, we find it very difficult to find good help even at a larger starting wage. I would like to see a $7.25 starting wage for about the first 3 to 6 months to see if they will work out. only then go to a minimum larger wage. Many times the choices of applicants is slim & can't handle the job. At that point I feel the money has been wasted.

A friend recently got a job

A friend recently got a job at a big box retailer. He knows the products already. It's part time. Wage: $8.75/hour. Then they have the nerve to say "we have an app for your smartphone that will help you help customers find things". Really, give the poor guy a phone then. Lucky if he gets $200/wk after holdings. How could he even afford a smartphone. I truly believe if people were paid better, the economy would grow faster. As mentioned, if you pay well, employee's care a lot more, without being asked; they will take pride. I had a boss once, that would walk up to me couple times a year "there will something extra in your paycheck next week for the great job your doing (it was several hundred, or even an entire weeks pay). I can't tell you how much difference that made, being acknowledged financially, and not just a quote of "keep up the great work", (for the same pay). At another job, I got a raise that was 2.5%, which amounted to $20/wk, whoopee. Especially when the cost of living when up 10%. A 2.5% raise can be a decent amount if you already making near $100,000. When you make $35,000, it's not much at all. Pay well, and your business will be rewarded 10 fold.
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