What is in this article?:
- Restaurant response to State of the Union is mixed
- More operators weigh in
Some in the industry support the proposed federal minimum wage hike proposed by President Obama while others oppose it.
President Barack Obama’s call for increasing the federal minimum wage to $10.10 per hour ups the ante from his earlier push to bring it up to $9.
It also falls below efforts by labor organizations and fast-food protesters to increase the wage to $15.
Still, with states taking action, some restaurant chains are still forced to deal with higher labor costs in the next few years.
In his State of the Union address Tuesday, the president offered to lead by example by issuing an executive order that will require federal contractors to pay their employees at least $10.10 per hour. It’s not clear how many people would be impacted, and the order would only apply to new contracts.
Far more workers would be impacted if Congress approves a measure introduced last year by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., which would raise the federal minimum wage to $10.10 per hour and index it to inflation by 2016 — what would amount to a 40-percent increase from the current federal wage of $7.25.
Meanwhile, Obama urged business leaders to act, taking initiative to raise their starting hourly pay above the minimum wage, pointing to companies that contend a higher wage can boost productivity and profit.
The reaction from the business community was mixed. Here’s what some restaurant operators had to say:
Paul Saginaw, co-founding partner of the Zingerman’s Community of Businesses in Ann Arbor, Mich., which includes a deli, bakery, catering company and other associated businesses, said:
“I’m very much in support of the Harkin-Miller bill. In March, we will have been going 32 years. I started with a partner and two employees and we did a little under $100 our first day. Now we’re a community of businesses with 17 partners, and all of them other than my co-founding partner started as regular employees. We now have about 620 permanent employees, though that swells up during the holidays. We’re going to do about $50 million cumulative this fiscal year, and we’ve been profitable 32 out of 32 years. And we’ve never paid anything close to minimum wage. …
“We’re continuing to try and boost entry level wages because we believe that if an employee is not burdened with an enormous amount of financial stress, they’re more likely to perform well and to stay. It lowers the cost of screening, interviewing, on-boarding and training, and ultimately turnover, and that contributes to the bottom line. Our goal is getting (entry wages) up between $12 to $13 within the next 18 to 24 months. It’s a large ship to steer, but we’re on that path. For me, it’s an embarrassment that the food industry has the highest percentage of working people in poverty. We would like to change that.”