The ramifications of the $15 minimum wage are beyond what many may know. Herewith is a trip through the subject as put forth by our September 29th speaker, Bob Donegan, CEO of Ivar’s:
- What wage to start at–immediate or phase in?
- Over what period to phase in?
- What is included in income, i.e., tips, bonuses, health care benefits?
- Determined by size of organization or the sector?
- How is law to be enforced?
Principles agreed upon:
- All employees to be treated the same
- All compensation that appears on W-2 has to be included
- The training phase for high school graduates, ex-convicts, and immigrants begins with a phase-in wage to work up to $15/hour.
- If an employer has more than 500 personnel, this business is a large employer, which must get to the wage in 3 years. If health care insurance is included, 4 years. Tips must be included in the case of small employers.
The question arises as to whether to increase revenue by adding a service charge or raising item prices? The solutions range from one of these to another in various restaurants. The Ivar’s sites will go to $15 over 3 years…If a service charge occurs, it must be shown on the menu what it is and where it is to go. If a price rise is made, this is not necessary. No tips are expected at Ivar’s. But 40% of patrons leave tips, over and above the price rise. Parity between the out-front workers and the kitchen staff has had to be achieved.
The results to date:
- –People have bought fewer items.
- –Customer accounts and sales are down.
- –90% of employers raised wages.
- –62% of employers raised prices.
- –30% laid off workers.
- –30 added a service charge.
Primary factor that has raised employment is the vigorous economy:
- Many high rise cranes…
- Record year for cruises
- Hotel occupancy is over 90%
- Unemployment is less than 3%.
Obviously, the economy is driving more changes than the minimum wage law. A city law requires that all employees must be given a notice of two weeks as to what their schedules will be. Initiatives regarding paid time off and gender equality will probably pass.