$15 min­i­mum wage crip­pling for busi­nesses

Tampa Bay Times - - Opinion - BY JAMES SPARKS James Sparks is the owner of Nick’s Piz­zaria & Wings in Plant City.

Florida’s Depart­ment of Eco­nomic Op­por­tu­nity is ex­pected to an­nounce Fri­day that the state’s 2018 min­i­mum wage will rise to $8.25 an hour. For small busi­nesses like mine, such a mod­er­ate wage in­crease poses lit­tle op­er­a­tional dif­fi­cul­ties. What wor­ries me is the grow­ing ac­tivist-led statewide push to nearly dou­ble the min­i­mum wage to $15. This wage floor would have a dev­as­tat­ing im­pact on small busi­nesses like mine and the peo­ple they em­ploy.

Po­ten­tial Florida gu­ber­na­to­rial can­di­date John Mor­gan has made a min­i­mum wage in­crease in the $15 range a cen­ter­piece of his nascent cam­paign. Even if he de­cides not to run for gov­er­nor, he has vowed to put such a pol­icy to vot­ers in the form of a 2018 or 2020 bal­lot mea­sure.

I can tell Mor­gan from first­hand ex­pe­ri­ence that his legacy would be fewer small busi­nesses and starter job op­por­tu­ni­ties in the state.

Con­sider my busi­ness, Nick’s Piz­zaria & Wings in Plant City. I’m not hard-hearted. I’d love to give my em­ploy­ees a raise. But it’s sim­ple math. My profit mar­gin hov­ers around the restau­rant in­dus­try av­er­age of 5 per­cent. La­bor costs make up about one-third of my ex­penses. While I pay my ex­pe­ri­enced em­ploy­ees far more than min­i­mum wage, if my en­try-level la­bor costs nearly dou­bled un­der a $15 min­i­mum wage, I would have no room to ab­sorb it.

Min­i­mum wage sup­port­ers some­times re­spond to my ar­gu­ment by claim­ing the costs of min­i­mum wage in­creases can be off­set by menu price in­creases. But my cus­tomers are ex­tremely price sen­si­tive. If I raise prices to try to cover in­creased la­bor costs, some of my cus­tomers would go else­where — or sim­ply choose to eat at home. Cut­ting prod­uct qual­ity isn’t an op­tion, ei­ther — that may be the de­sired ap­proach of some in cor­po­rate Amer­ica, but it’s not my busi­ness model.

Real­is­ti­cally, my only op­tions would be to sell a busi­ness that no one would want to buy given the $15 wage rate — or close my doors.

My story is not unique. In a re­cent sur­vey of Florida small busi­nesses likely to be im­pacted by a $15 min­i­mum wage, more than 1 in 6 re­spon­dents would have no way to op­er­ate in a $15 min­i­mum wage en­vi­ron­ment and would be “very likely” to close or sell their stores. (I was one of those sur­veyed.)

These aren’t job op­por­tu­ni­ties that many com­mu­ni­ties in Florida can af­ford to lose. In Plant City, over one-third of young peo­ple aged 16-24 are un­em­ployed, ac­cord­ing to Cen­sus Bu­reau data. These young job seek­ers are miss­ing out on more than just a job. I teach my em­ploy­ees vi­tal soft skills like cus­tomer ser­vice, a sense of ur­gency and the im­por­tance of team­work that can help them through­out their ca­reers.

Mor­gan says he’s 100 per­cent cer­tain he’ll put a min­i­mum wage amend­ment in the $15 range to Florida vot­ers. My story and those of other small busi­nesses like mine should give him and his sup­port­ers pause.

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