Most Waxahachie establishments say salaries and prices will be business as usual, even as the first of the incremental federal minimum wage increases passed in May takes effect today in Texas.
At least after the initial change-over to $5.85 an hour from $5.15, many business owners and managers say they aren’t anticipating any noticeable changes.
“Everybody here makes more than that already,” said Jimmy Poarch, owner of Oma’s Jiffy Burger on Water Street, noting the average salary at his restaurant is about $8 an hour. “Because that doesn’t affect us, we won’t have to increase our prices.”
General Manager of the Waxahachie Applebee’s Jason Gross said the establishment is similarly situated.
“Everybody is already way higher than that right now,” he said, except for the wait staff, who as “tipped” employees are exempt from the increase.
Roger Richardson, owner of the Snow Biz snow cone stand on U.S. Highway 77, said he starts his employees at minimum wage, but that salaries are raised frequently. Although he doesn’t anticipate any price raises yet, the mandated increases to $6.55 and $7.25 hourly minimum wages in 2008 and 2009 will probably mean more expensive snow cones.
“Then it will affect prices. It will have to … between the minimum wage and the fuel prices,” he said.
Richardson said all three of his Snow Biz locations, including one in Ennis and one in Corsicana, will eventually have to raise their prices. In the past, he said, the price generally increased about 25 cents a size, though it’s too soon to predict what the actual change may be.
Still, he thinks the raise is a good move on the part of Congress.
“It’s good, with the price of everything,” he said. “People need the extra money too.”
By and large, Waxahachie’s employees are making more than even the new minimum wage — starting salaries are $7.25 at Wal-Mart, about $8 at Courthouse Caf/, about $7 at Chic-fil-A and between $6.35 and $7.25 and higher at H-E-B, depending on the position.
Co-owner of Chief’s Super Sud Laundromat Floyd Bates said he used to start his employees at $5.50 an hour, but that the business had begun hiring at $6 when the old wage just wasn’t enough.
“It didn’t hardly work any more,” Bates said.
Long-term, however, Bates said the business doesn’t plan any lay-offs, but they’ll have to wait and see whether prices go up.
“Looking down the road, it’s going to be tough on small businesses,” he said.
Jim Audley, manager at Cici’s Pizza in Waxahachie, said the first hike won’t affect the business, but that adjustments will need to be made as the increases continue for some of his employees.
“Some of the staff members are making around $6 and we’ll have to incrementally move them up,” he said.
Audley noted the restaurant does not anticipate any layoffs or price changes due to the wage increase.
A small percentage of Mineyard Food Store’s employees were being paid below the new minimum wage, Waxahachie manager James Hunt said, and any other changes would likely be announced after the company’s main office assesses the effects of the legislation.
“They’ve told us as far as the company is concerned, most of the 5,000 employees we got, only about 150 of them are currently below minimum wage,” he said. “Anybody below that is going to get minimum wage.”
Hunt said most of those below the new minimum wage are young, temporary workers.
The wage increase, the first in more than a decade, passed with a strong Democratic backing in May in the face of opposition from some Republicans and small business and restaurant interest groups.
Proponents of the bill say the increases will raise the quality of life for minimum wage workers, who under the $5.15 hourly wage made about $10,400 a year full-time, well below the poverty line, according to the American Federation of Labor and Congress of Industrial Organizations.
National Federation of Independent Business Texas spokesman Laura Stromberg said in both the short and long-term, consumers, workers and business owners will see negative impacts from the wage increases.
“Consumers will begin seeing the impact of the minimum wage hike immediately in some cases, and it certainly depends on the type of business,” she said.
Stromberg said raising the minimum wage would harm unskilled workers, especially student workers, by pricing them out, making it more difficult for businesses to hire and retain them.
“Our research has shown that the minimum wage increase doesn’t necessarily reduce poverty or narrow the income gap — it just hurts small businesses. Small businesses are by and large the ones that provide minimum wage level jobs,” she said, citing the changes will affect every type of business from restaurants to construction companies to dry cleaners.
A press release from the organization said minimum wage increases also often lead to reduced hours for employees, unfilled vacancies, fewer wage raises and some price increases.
Many small businesses pay above minimum wage, Stromberg said, but even these may face expectations and requests from employees for equally increased pay, she said.
“This is a huge issue for our organization,” she said. “It’s very much an across the board impact. I don’t think there’s any industry that won’t be affected somehow.”
Northgate Cleaners employee Amanda Griffith, who makes $7.50 an hour, said she doesn’t expect any direct impact from the minimum wage increase.
“All my friends get paid above minimum wage,” she said. “It hasn’t affected me.”
According to the U.S. Bureau of Labor Statistics, 173,000 workers made $5.15 an hour or less in 2006 in Texas, giving the state the largest number of minimum wage recipients in the country for that year. That number represented about 3 percent of Texas’ hourly-paid employees and about 10.2 percent of the United States.