New minimum wage law in Tacoma forces businesses to get creative

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Happy Belly owner Jennifer Johnson said she will be adjusting prices at her restaurant in order to absorb the increase in minimum wage. Photo by Andrew Fickes

For 17 years, Markeen Tower, her daughter Erin Behnke and their staff at Pomodoro Italian Restaurant & Bar (3819 N. 26th St.) in Tacoma’s Proctor District have treated guests to premium food and a unique dining experience. Following Tacoma’s minimum wage increase from $11.15 in 2017 up to $12 an hour now in effect as of Jan. 1, Behnke said it’s her goal to not compromise her restaurant’s promise to customers of providing great service and great food at a reasonable price. Voters approved in 2015 a $12 minimum wage per hour phased in over two years. The wage started at $10.35 on Feb. 1, 2016.

“We are evaluating increasing costs right now and we are evaluating labor hours,” Behnke said. “Employees have to be more productive. We don’t have a cushion for labor. Labor is one of our biggest expenses. We are evaluating reducing labor hours daily.”

Behnke said it’s always been important to be diligent about conserving labor hours but now it’s even more crucial.

Behnke said it’s always been important to be diligent about conserving labor hours but now it’s even more crucial.

Also concerning to Behnke is the City of Tacoma’s new paid sick leave policy that went into effect Jan.1 and is now more in line with the statewide paid sick leave policy. According to the City of Tacoma, the policy stipulates that employees earn an hour of paid sick leave for every 40 hours worked with no annual cap on accrual. Employees qualify for paid sick leave 90 days after their hire date. An employee can carry over up to 40 hours of unused paid sick leave to the following year.

Behnke said it puts strain on the business to not only absorb a $1.65 minimum wage increase over the past two years but also to now have to pay for each employee’s sick leave.

“We can’t do business with a person gone for the day,” Behnke said. “You have to replace that person for the day when someone is sick. Now we have to pay two people for the job of one.”

Behnke said of her 23 employees, more than half are on minimum wage. Based on a $1.65 pay increase over the past two years, Behnke estimates it equates to a 16 percent increase for her payroll. And that’s not including sick leave.

“That’s a big difference for a small business,” she said. “What (lawmakers) don’t understand is the impact all these mandatory laws have on a small business. Everything is easier said than done until you look at the bottom line.”

At Happy Belly, (1122 Market St.), owner Jennifer Johnson said she understands the value for an increase in a living wage for people in general but doesn’t believe a business can quickly absorb such an increase without first adjusting prices to the consumer.

“Like with any type of inflation there has to be an increase,” Johnson said. “We will be increasing prices on our products across the board. Some products will see not so much of a price increase.”

Happy Belly celebrated three years in business last October. It serves vegan, vegetarian and meat dishes, and caters to customers’ dietary needs. Johnson said her business is receiving price pressures also from the cost of food products from suppliers who in turn have to raise minimum wage for their warehouse workers. In addition, Johnson said the increases on business licenses and health department licenses also put a strain on her restaurant.

In the slower months of winter, Johnson employs five people. Her employee pool will double in the summer.

“We’ve been paying them more than the minimum wage,” Johnson said. “Half of our staff already makes more than $12 per hour and the other half will increase to $12.”

In regard to the paid sick leave policy, Johnson said her kitchen manager, who works 32-38 hours per week, will be the only one affected.

Over at the Pacific Northwest Shop (2702 N. Proctor), owner Bill Evans said the ability for a business to survive continuing increases to labor costs is all based on the limits of its creativity and innovation.

“We have always been above the minimum wage,” Evans said. “It hasn’t impacted us too much, because we’ve managed being above it and staying in business.”

Evans said his shop’s survival over the past 44 years has been largely attributed to its ability to adapt to changing technologies. Today, the shop not only runs a thriving brick and mortar store but also fulfills online orders for Amazon as well as in-house online orders that span the globe. About 10-12 percent of its sales are devoted to online.

“It’s amazing,” Evans said. “You’re not going to be able to offer even minimum wage if you’re not creative in how to survive. We opened our Seattle store a few months ago; it will be interesting to see how we survive in Seattle.”

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2 COMMENTS

  1. At Happy Belly, (1122 Market St.), owner Jennifer Johnson doesn’t seem to fully understand the new law In regards to the paid sick leave policy,
    “ITS EVERY 40hrs REGARDLESS OF THEIR FT/PT STATUS, THAT AN EMPLOYEE WORKS, 1hr OF SICK LEAVE IS ACCRUED,”
    Example
    40 hours over a two week period = 1 hour of sick pay
    40 hours in a one week time period = 1hr of sick pay.

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