LOUIS KRAUSS | THE DAILY WORLD Organics 101 Market and Smoothie Bar owner Michelle Hutchinson stands in her store in Montesano. She acknowledged the financial hit of higher minimum wage but supports giving workers better salaries.

LOUIS KRAUSS | THE DAILY WORLD Organics 101 Market and Smoothie Bar owner Michelle Hutchinson stands in her store in Montesano. She acknowledged the financial hit of higher minimum wage but supports giving workers better salaries.

Local businesses react to raised minimum wage, paid sick leave

With the new year comes a couple added benefits for employees in Washington state, in the form of mandatory paid sick leave and another increase to minimum wage.

Starting this month, the statewide minimum wage goes up to $11.50 an hour, a 50 cent increase, and all employees must earn at least one hour of paid sick leave for every 40 hours worked.

While mostly in favor of having paid sick leave, some local business owners are concerned about the financial challenges created by yet another minimum-wage increase.

“It’s just one more way people who don’t own businesses are making it rough on people who do,” said Bob McEndoo, co-owner of Gepetto’s Italian Restaurant in Montesano. “They don’t understand the ramifications of, ‘It’s only 50 cents,’ times 500 hours for every two weeks.”

McEndoo said eight of his 11 employees would be getting a pay raise to accommodate the minimum wage, which the state is planning to steadily increase to $13.50 by 2020. He estimated that the change would make a difference of about $6,000 per year.

“Just to pay a dishwasher an extra 50 cents per hour doesn’t seem quite right,” he said. “Dishwasher isn’t a career, it’s what you do when you’re going to school.”

The problem, he believes, is partially that Seattle’s much higher average home cost of more than $700,000 has influenced the steady minimum wage increase in the state. Seattle’s minimum wage for large employers is at a higher $15 per hour.

“Even there you can’t live on $15 per hour,” he said. “It’d take both parties making $30 an hour to pay for it.”

In contrast to McEndoo, some business owners voted in favor of the new minimum wage hike, viewing it as a chance to provide employees a more realistic salary to live off. Montesano’s Organics 101 Market and Smoothie Bar owner Michelle Hutchinson supported the changes, even though she realized it might hurt them financially.

“Yes, it could be tough, but we knew what we were voting for,” she said. “Everyone deserves to make enough for them to really live off of. I think research right now shows if you had a part-time job in Grays Harbor, you could barely afford to rent here.”

Others, like Dick Murchy from Boomtown Records in Aberdeen, think the higher minimum wage isn’t a big enough change to fix what he sees as a glaring disparity between the rich and poor, and a shrinking middle class.

“When you think of the disparity between the rich and poor, it’s probably not enough,” said Murchy. “You can talk $15 an hour, and increments up to that, but with the disparity, economically it should probably be about $25 or $30 an hour. The problem is us little guys can’t afford to do it.”

So far, businesses haven’t been too outspoken about the changes, according to Aberdeen Small Business Development Center representative Jerry Petrick. He said most businesses have gotten into a rhythm to plan for new minimum wage costs each year, and that the new paid leave rules would be slightly trickier to incorporate.

“The more challenging issue for businesses to deal with are the new paid leave regulations, the rules are new to everyone so the clarity isn’t there yet,” said Petrick in an email. “I strongly encourage all businesses (including those with existing paid sick leave policies and benefits) to review the requirements carefully to make sure there are no unintended violations; especially around policy administration and record keeping.”

McEndoo said he would start requiring workers to provide a doctor’s note if they were taking sick days, but he wasn’t too concerned about the small cost of that change. He does feel, however, that these costs, along with others that go up annually, are making it harder for small businesses to make it.

“If you look at broad picture, new Labor and Industries rates go into effect, the new unemployment rate. It’s small increments of increase, but added together they make a lot,” said McEndoo. “It’s a constant drain, there’s more and more costs, and then people complain about the food being too expensive. I’ve been doing it for 25 years — we’ll figure out something.”