Local 7-Eleven franchises have added a 25-cent fee to every transaction in response to the state’s new minimum wage requirement of $11 per hour beginning Jan. 1.
Signs posted inside the stores read: “On January 1, 2017 minimum wage increased to $11.00 per hour. In order to continue the level of service our customers deserve a 25 cent per transaction fee will be added to each purchase. This will be listed as ‘Checkout Bag Charge’ on your receipt. This fee is in lieu of raising prices throughout the store. Thank you for your understanding.” The signs have gone up in at least three local stores: Market Street, South Boone Street and Simpson Avenue. The owners of these franchises were not available for comment when attempts were made to contact them Wednesday afternoon.
After the passage of Initiative 1433 last year, the state’s minimum wage grew to $11 an hour Jan. 1, an increase of about $1.50, and will go up annually until reaching $13.50 in January 2020.
Some of the businesses in the area are taking a different approach, noting the initial financial hit won’t be too bad for businesses that already pay a competitive wage.
“It’s going to initially have a minimal impact on us,” said Brent Dennis with the Dennis Company. “Our starting wage is just below that, and maybe four new people out of the 80 to 95 people we employ will have their wages go up.”
Jon Martin, owner of Martin Bruni Liquor, also says his business, which employs about 10 people, typically paid above the state’s minimum wage as it stood in 2016. With the increase, however, he was forced to raise prices to cover the higher wages.
“Because of salaries going up we had to raise our prices,” he said. “Even prior to this, the state had one of the higher minimum wages, and it went up every year because it was tied to the consumer pricing index.” The consumer pricing index is a measure of the average change over time in the price paid by urban households for a set of consumer goods and services. As it rose, so did the state’s minimum wage. After 2020, the wage will rise along with the cost of living index, according to the language of the initiative.
Ray Meyers, owner of Genes Stop N Go in Montesano, said their business already had to close for the winter “because business was not sufficient enough to cover costs. I can only say for sure that there is a ceiling to what we’ll be able to support as a wage. I don’t know what that number is, but we sell hamburgers, pop and ice cream — low profit margin foods. When we’re busy and we have people lined up, we can make it with an increased minimum wage. But we can’t stand around waiting for customers to show up. In the current Grays Harbor economy, that’s a lot of the time right now. So we’ll see what happens.”
Washington ranks in the top three highest state minimum wages and is well above the national minimum wage of $7.25. Initiative 1433 also included a sick leave requirement; employees must earn at least one hour of sick leave for every 40 hours worked starting Jan. 1, 2018.
“Next year the big impact for small businesses is the requirement for sick leave,” said Martin. “For large organizations it’s not a problem, but if you’re a small business with one employee and that employee is sick you’re kind of stuck. I think (the initiative) passed originally to impact larger businesses, but since the same rules apply to everybody it will have a much greater impact on smaller businesses.”
As the minimum wage rises over the next five years, “down the road we will have to do some adjusting,” said Dennis, adding, “It’s unfortunate in my opinion the legislature could not come to an agreement. I don’t like how it came down to an initiative.”
The larger economic impact of the increased minimum wage won’t fully be known for a while. For example, local business owners aren’t sure if the significant raise for minimum wage employees will lead to demands for similar raises by workers making more than the minimum wage. “And right now we don’t have any idea what it’s going to look like from a consumer’s standpoint,” said Martin. He fears one of the most vulnerable populations, senior citizens, will be hurt the most. “The people who are employed will get increases, but the seniors won’t because they are on a fixed income.” With rising salaries will come increased prices, with no relief for seniors.
Another consideration for business owners is the impact the higher minimum wage will have on the overall economy. “This state is one of the harder places to do business, and if you’re competing with Idaho, Oregon or whatever it takes out competition in wages.” If a business wanted to relocate to Washington, the higher minimum wage might discourage them when a cheaper labor pool is available elsewhere. An operation that does business outside the state, like Martin Bruni that ships liquor across the nation, may find it harder to compete when their prices go up to offset higher wages.
“Smaller businesses, mom and pop businesses, will be dramatically impacted,” said Martin.