Yellow Pages
A spike in the state minimum wage may be the last straw for some local business owners trying to get by in a slow economy.
The state minimum wage for 2009 increased by 48 cents Thursday, bumping the current wage from $8.07 to $8.55 per hour.
The increase is the result of an initiative passed by voters in 1998 requiring the state to adjust its minimum wage annually.
“Minimum wage affects us each and every year, but this is the biggest increase in a long time,” said Cheerie Carr, who owns Hal’s Drive In in Sedro-Woolley.
The change is based on a national index that measures the costs of goods and services needed for an employee’s day-to-day living, according to state Department of Labor and Industries officials.
January’s increase marks a 5.9 percent hike in the index, called the federal Consumer Price Index for Urban Wage Earners and Clerical Workers.
In January 2008, the state minimum wage increased 14 cents from $7.93 to $8.07. The federal minimum wage currently sits at $6.55 per hour.
Although most employees probably appreciate the increase, business owners who hire minimum wage employees said the higher rate poses another challenge for their business.
Brad Whaley, owner of Café Burlington, said he will have to reduce some employee hours and increase his work schedule to make up for the increase. He works a shift five days a week, but said he will have to work six days a week, sometimes from open to close.
“It’s really impacted us,” Whaley said.
Carr at Hal’s Drive In said the restaurant’s hours have continued to be reduced.
The restaurant previously operated from 10 a.m. to 9 p.m., but beginning last summer the hours were changed to 11 a.m. to 8 p.m., similar to winter hours. About three weeks ago operating hours were reduced further from 11 a.m. to 6 p.m.
Both Carr and Whaley said over the past few years their businesses have also reduced staff. Whaley said his staff has decreased from about 15 employees to eight.
Carr said in the summer months they had about 18 employees at Hal’s Drive In. The business is currently down to about 12 employees and Carr foresees the restaurant having fewer workers in the future.
Beginning this year they are reducing the number of employees working each shift from four to three, she said.
“We’re digging in and holding on and just hope you can hold on through this crisis,” Carr said. “The wage increase is like the straw that broke the camel’s back.”
Businesses that don’t rely on minimum wage employees, such as Stowe’s Shoes and Clothing and Fairhaven Cafe, will not be as affected by the increase, business owners said.
Peggy Stowe, owner of Stowe’s Shoes and Clothing, said the store used to hire high school students. The store is open only until 6 p.m. and younger workers are usually not available until later in the afternoon, she said.
Stowe said they enjoy the younger staff, but the money adds up after the amount of training younger employees require and the hours they can work.
Wages for 14- and 15-year-old employees may be paid at 85 percent of the adult minimum wage, which will be $7.27 per hour in 2009.
Gary Lorenz, owner of Skagit Valley Gardens in Mount Vernon, said at this point he is not sure how the minimum wage increase will impact his business. The majority of new employees are hired at minimum wage but typically receive a pay increase later.
Lorenz said each year he hires additional staff in February and March for the spring and summer seasons, but he isn’t sure how the increase will affect the hiring.
“(The increase) is certainly coming at a bad time with the economy being down,” Lorenz said. “We will have to watch costs and expenses this time of year, especially with the economy.”
He said he understands the reason for the increase, but that it’s a “fairly significant” increase that is coming at a bad time for businesses.
Business owners said in order to be fair and maintain the wage gap, the hike usually applies to all their staff and not just their minimum wage employees.
Usually all employees feel justified to receive the increase, Lorenz said. As a business owner it is sometimes difficult to make it equal across the board, he said.
The minimum wage spike is just another negative factor that’s going to raise businesses’ expenses, Lorenz said.
“I think most businesses are walking a tight rope right now,” he said.
