Advocates for a big increase in the minimum wage say Maine’s poor will benefit, but some Maine small business owners believe the policy will harm the very people it’s supposed to help.
Steve DiMillo is the manager of DiMillo’s Floating Restaurant and Marina in Portland. And he’s concerned about Portland Mayor Michael Brennan’s push to establish a local minimum wage that would exceed President Obama’s proposed goal of $10.10 per hour.
“A minimum wage hike to $9.50 per hour in 2015 and possibly even to $10.75 by 2017 would create economic hardship on locally owned businesses that will hurt job opportunities for the very people that the wage hike is intended to help,” DiMillo wrote in a recent op-ed.
DiMillo said his waitstaff already make between $16 and $22 per hour because of tips, and that an increase in the tipped minimum wage could cost restaurants like his roughly $10,000 per employee per year.
He said restaurants will respond to increases in the cost of labor by raising prices, cutting back on employee hours or benefits, or moving to automated technology.
Dan Beck, owner of the iconic Moody’s Diner in Waldoboro, has had his own run in with minimum wage advocates. According to Beck, anonymous liberal political activists lifted an image from a magazine story about his restaurant and photo-shopped it into a pro-minimum wage hike infographic.
Judy Moody Beck, the 80-something-year-old pie-making grandmother featured in the stolen image, is disgruntled over the use of her likeness to support a policy she and her family completely disagree with.
Like DiMillo, the Becks believe that an increase in the minimum wage would harm the very people supporters intend to help.
Under the president’s proposed increase and those considered in the Legislature, he wouldn’t be able to cut back on the number of employees and would have to find other ways to accommodate a minimum wage increase.
“I’d have to cut back on benefits and increase my prices,” said Beck.
“I wouldn’t have the extra money in the budget to give raises to workers who go above and beyond,” he said. “I wouldn’t be able to reward hard work.”
Beck said his older customers and young people seeking entry-level work would be most harmed by the proposed increase.
“A lot of my customers are older people… They’re more sensitive to price increases,” he said. “[A minimum wage increase] would make me less likely to take a risk on hiring a high school kid,” he said.
He is also concerned that the proposed minimum wage increase disproportionately harms small businesses, as larger corporations and restaurant chains can more easily adjust to increased labor costs. “It’s the little guys who suffer,” he said.
Beck said some of his employees have been with him for more than 30 years. “You don’t get that by treating you workers poorly,” he said.
The non-partisan Congressional Budget Office has estimated that increasing the federal minimum wage to $10.10 per hour would result in the loss of between 500,000 and one million jobs while moving roughly 900,000 people above the poverty line.
Time to make the minimum wage a live-able wage. Why on earth should we subsidize businesses, large or small, for the true cost and value of labor? If your business is not profitable, or cannot become profitable without exploiting people, maybe it deserves to be weeded out. Sound cold and unsympathetic? That’s what capitalism is all about. I ran a business for 12 years. I paid fairly and provided benefits THEN I took my profits. Worked pretty well.