Minimum wage increase causes big changes for businesses

What does the rise from $9.47 to $11 mean for local businesses?

  • Monday, January 23, 2017 2:06pm
  • News

Minimum wage in Washington state rose from $9.47 to $11 starting Jan. 1. While many employees celebrated, employers were less enthusiastic about the large increase.

In the last 20 years, Washington state hasn’t seen an increase as high as $1.53.

The largest increase in the last 10 years happened between 2008 and 2009 and that increase was just under 50 cents. The minimum wage usually increases by 20-30 cents or less every year. To say the $1.53 increase is steep, is an understatement.

Many restaurant and coffee shop owners and managers in Maple Valley, Covington, Renton and Kent agreed to speak off the record. The coffee shop owners and managers in Renton wanted to be off the record because of fear it would drive costumers away with the increase in prices. Other restaurant representatives in Maple Valley wanted to be off the record because they had not spoken to their staff about their plans for the future.

One restaurant owner in Covington was the only one who said there would be no change to anything and even gave their cooks a raise to match the raise minimum wage workers were getting. The owner said they wanted to keep their staff because it’s the staff who makes a restaurant great and keeps people coming back.

Another restaurant was not cutting hours or decreasing their staff, but they had to take away some perks the servers received, such as a small, free shift meal they used to receive. The reason for it, according to the manager, was because if they took away the free meal they would be saving money and would not have to increase their menu prices even more.

Most of the restaurants owners spoken to were making significant changes because of the minimum wage. The increase has caused a ripple affect with every business, as is the case with one small business owner in Maple Valley.

Tanya Neilsen, owner of Thrive Community Fitness in Maple Valley, has had made some significant changes in the last few weeks. Between December and January when the change took place, she has spent between $25,000 to $30,000 just on the changes minimum wage has brought, she said. The vendor’s prices have not increased, but she is afraid they will. Since vendors will have to pay their employees more, she is afraid they will want to make up that money by increasing their prices.

Some of the services she offers have been cut because she has cut back some of her employees’s hours, so there aren’t enough people to run the services. The prices of the services she offers have also increased.

“We value all of our employees so this makes it very hard on us,” Neilsen said.

Because of the increase, Neilsen is looking for people with more experience rather than hiring people with no experience, to make up for the increase. She would rather start her employees at a lower rate and increase their pay as they gain experience. Unfortunately, that can’t happen.

Neilsen pointed out that a minimum wage job got her to where she is now, a small business owner.

“I’m not college educated and because of minimum wage jobs, I worked my way up,” Neilsen said. “It was a stepping stone for me.”

The target group that would be receiving the high minimum wage is the one being most affected with the changes a lot of businesses are making, Neilsen said.

Minimum wage is set to keep increasing until 2021 when it reaches $13.50.

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