Park City merchants grapple with possibility of minimum wage hike
As the debate surrounding raising the federal minimum wage to $15 an hour continues to swirl, with two states opting on their own to implement an increase, many small business owners in Park City have begun to consider what a wage hike would mean for them.
Restaurants in town have said a $15 minimum wage would have little effect on them, as most of their employees already make close to that or above. But some small merchants admit that they might not have such an easy time finding the cash to pay their workers the additional money.
Hubie Rosch, for instance, sees three options. His company, ACME Threadware, which offers clothing embroidery and screen printing, has seven employees, who start at $11 an hour but earn $13 after about six months. The extra $2 an hour per employee would total roughly $560 a week, plus the taxes that would go along with it.
That would force him to do one of the following, he said: raise prices, lay off staff or reduce his already-thin profit margin.
"None of those," he said, "are good for a small business in a small town."
Rosch said he would explore raising prices before laying off employees. Since many of his customers are businesses, rather than the general public, it might be a more viable option for him than for many other companies in town.
"I think the harder ones are the stores where you’re dealing with a public that has limited funds," he said. "If you’ve got to raise your prices to cover your overhead, it can be tough."
But while raising prices may work, it would not be without risks for Rosch, who competes primarily against companies in Salt Lake City. Rents are typically cheaper there, so his competitors may be better equipped to deal with a wage hike and might not have to bump up their prices.
"Could I squeeze more money from the locals for my product?" he said. "Or would they decide, ‘Well, now it’s just cheaper for me to drive to Salt Lake.’"
Cutting into his margins to cover a wage increase might also be a workable solution, but it could call into question the viability of the business from a personal standpoint.
"So instead of making 8 percent (margins), maybe I’d only make 6 percent," he said. "And you have to think, ‘Is that livable for me? Can I live on that?’"
Other owners, however, envision no such problems. Jon Allen owns J.W. Allen & Sons Toys & Candy, a small toy store in Redstone, and already pays his employees $15 an hour. He said it’s an attempt to keep good workers around in a business climate where everyone seems to be struggling to retain employees.
"There really would be no change on that for me," he said of the prospect of an increased minimum wage.
But even Allen acknowledged that many others might not be so lucky. He said the kind of businesses an owner runs would largely determine how well they’d be able to adapt.
"Certainly in my previous life, when I had a packaging company and a manufacturing company, it would have put me out of business," he said. "But that’s because you’re competing with China and abroad. It was tough enough to try to make ends meet with a minimum wage at ($7.25). But on the other hand, everything has gone up in price, and even making $15 an hour, it’s get-by money in Park City, that’s for sure."
Allen added that few businesses in town, if any, pay only the current minimum wage. He speculated that businesses that already pay close to $15 an hour may be able to weather a wage hike, depending on how many employees they have.
"Judging from what I see even in the big-boxes, the starting salary is $10 or $11 and up," he said.
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