Small-business managers in Watertown who employ low-wage workers say theyll soon need to find ways to cope with higher payroll expenses because, on Jan. 1, the states minimum wage will climb from $7.25 to $8 an hour.
Its going to affect me drastically, said Timothy L. Mack, regional manager of six Original Italian Pizza locations, including one on North Massey Street in Watertown. Were probably going to have to cut down the amount of labor per shift. Instead of having two people at the counter serving customers, we might have just one.
The measure is only the first of three incremental wage hikes approved in the state budget passed in March; for most workers, the minimum will increase again at the end of 2014 to $8.75 an hour, then to $9 an hour a year later.
Original Italian Pizza in Watertown, which opened in 2010, has six employees who earn minimum wage: two counter helpers, two cooks and two drivers. Mr. Mack, 33, said the business frequently hires workers fresh out of high school who are seeking to start their careers in the hospitality industry.
We just might have to raise the prices of our food just to get by, said Mr. Mack, adding that managing a small business always involves an element of risk. Our goal is to make adjustments to stay open, because everyone loses if the restaurant closes. It would take away the taxes that go to the town, county and school district. And this is a stepping stone for people with a high opportunity for advancement, and they lose that if it closes.
Scott P. Hirst, owner of Gold Star Deli at 343 Arsenal St., also hires employees at minimum wage. Because of the increase, three employees on staff will get a raise in January, he said. One employees wage will increase from $7.25 to $8 an hour; the other two will receive 50-cent raises to earn $9.50 and $10.50 an hour.
Mr. Hirst, 56, has witnessed the cause-and-effect relationship of minimum wage increases several times during his 27-year career and said he has learned that raising prices is unavoidable.
Little by little, the wage has kept going up over the years and become a bigger part of the overall overhead cost, he said. At the end of the day, you could put your finger on any one item thats being purchased whether its in a store, fast-food restaurant or auto dealer and there will be an ever-so-slight increase across the board.
In turn, the buying power of low-wage workers will diminish unless their wages also get bumped up, Mr. Hirst said. He is increasing the hourly pay for those who earn over $8 an hour to maintain a competitive wage.
In a way, I cant let the minimum-wage bottom catch up to them, he said. Because then they can go away and get better pay somewhere else.
Mark J. Bonner, owner of Franklin Street Dairy & Market, already pays the shops 10 workers more than $8 an hour. He has not decided whether to increase wages because of the minimum wage hike. The price of goods to stock the convenience store will climb because of the wage increase, he said, and the additional expense could make it difficult to manage a higher employee payroll.
Business owners have to pay employees and still make a profit, and I think raising the minimum wage is the easy solution offered by the government, Mr. Bonner said. Instead, they should pursue things that make the cost of products go down. If my (payroll) costs go up, I have to either take a pay cut or raise my prices to make up for it.
Most employees are paid more than $8 an hour at Colonial Laundromat, which has locations in Watertown, Gouverneur and Massena. Louis F. Brown, general manager, said the increased minimum wage still could spur the business to increase its hourly wages.
Usually the only time wages are increased is when the owner is up against the wall and has no other choice, said Mr. Brown, who oversees operations at 35 Colonial Laundromat locations across northern and central New York. Increases are always a good thing for employees, and I think it would help initially. But no one knows whats going to happen in the long run.
Christine L. Fuller, a laundromat attendant at the North Massey Street location in Watertown, was paid $7.50 an hour when she started working there seven years ago but now is paid more than $8 an hour.
Because of the high cost of rental housing in Watertown, the 51-year-old said, there are a lot of people who have a hard time making a living on minimum wage. I (take home) about $1,000 a month, and my house wouldnt be affordable without my kids living with me.
Ms. Fuller, who recalled the struggles she experienced when she was paid minimum wage, said an increase of a little bit each hour can make a big difference. There are a lot of people who go to (the Department of Social Services) to get food stamps and help with heat or lights.
Colonial Laundromat owner Timothy OConnell did not respond to a call Friday seeking comment.