Minimum wage increases are set to take effect July 1 in Nevada, Oregon, Washington, D.C. and various other cities and counties across the U.S. And for some local business owners, the hikes are a welcome — and much awaited — change.
An increase in minimum wage — and, thus, baseline salaries within local communities — allows businesses to flourish, Gina Schaefer, founder and co-owner of A Few Cool Hardware Stores, tells CNBC Make It. Schaefer owns 13 Ace Hardware stores throughout the D.C.-Maryland-Virginia metropolitan area.
“We will hopefully have more customers because people in town will be making more money. The city will have more tax revenue. And I like to hope and think that the employees who are making more money will have a more comfortable living existence in a lot of communities,” Schaefer says.
Paul Saginaw, a Las Vegas resident and owner of Saginaw’s Delicatessen, shares the same mindset.
“As far as minimum wage, it’s been way too low for way too long,” Saginaw says. “People can’t really live well that way.”
However, it’s worth noting that not all business owners agree. Some oppose minimum wage increases, as they boost overall costs. In 2022, for example, several Nevada business owners expressed concern over the state’s minimum wage increase, fearing it would hurt those with already-tight margins and drive all wages up.
That said, here’s how much minimum wages are increasing across the U.S., and why these two small business owners applaud the change.
As of Saturday, Nevada’s hourly minimum wage will increase from $9.50 to $10.25 for employees with health benefits and from $10.50 to $11.25 for employees without qualifying health benefits. A statewide minimum wage increase to $12 for all employees (regardless of benefit status) will take place in July 2024.
Oregon’s statewide standard minimum wage is set to increase from $13.50 to $14.20 per hour. In Portland, minimum wage will increase from $14.75 to $15.45.
In Washington, D.C., the $16.10 hourly minimum wage will increase to $17 per hour. D.C.’s hourly minimum wage for tipped employees will also increase, going from $6 to $8.
Just outside the capitol in Montgomery County, Maryland, minimum wage will increase based on the size of the company: $16.70 for large employers with 51 or more employees, $15 for those with 11 to 50 employees and $14.50 for smaller employers.
Minimum wage is also increasing in Chicago and San Francisco, among other cities and counties. In Chicago, minimum wage will increase to $15.80 for employers with 21 or more employees and $15 for smaller employers. In San Francisco, minimum wage will increase to $18.07 per hour.
For the past two decades, Schaefer has been an advocate for increasing the minimum wage, which she says will be a critical improvement not only for employees, but for the health of local economies.
“The more money people make, the more they can spend, and I’m a local business, I need people to be able to spend money in my stores,” she says.
Schaefer opened her first hardware store in March 2003, and has always paid employees above minimum wage. In 2021, she and her husband — who doubles as her business partner — also began selling their business to their employees through an employee stock ownership program.
“We wanted to make sure that we were attracting a really qualified candidate. And one of the ways that we could compete was to pay more,” she says.
She adds that metropolitan areas are expensive, and living in Washington D.C. comes with a hefty price tag. Schaefer wants to see financial comfort become more attainable in D.C., particularly for retail workers.
“To attract and retain employees who live close enough to be able to have easy commutes, they have to be able to afford to live here,” she says.
Ultimately, raising the minimum wage is a win for all, Schaefer says. She recognizes that the “minimum wage conversation” is not an easy one to have, but says it is hugely important to the health and happiness of communities.
Paul Saginaw has worked in the service industry for 41 years and has seen, firsthand, the power of raising wages.
Saginaw has paid his employees above minimum wage since 1982, he tells CNBC Make It. He was approached to open the delicatessen in Las Vegas seven years ago, after successfully opening and managing 11 businesses in the Ann Arbor, Michigan, area.
Paying above minimum wage is a business practice he is proud of, and one he believes is smart for all businesses to adopt.
Saginaw recognizes that keeping wages low may help keep prices low for the consumer, but argues that raising the minimum wage is good for the overall community, as more money earned translates to more money spent in the local economy. He also believes it is just “the right thing to do.”
“If you want your economy within your locale to be vibrant, then the people that are living there have to be making decent wages in order to keep the economy up,” he says. When employees have more money in their pockets, “it boosts the consumer buying power that we all depend on.”
Saginaw acknowledges that raising minimum wages, and raising the wages of your employees, requires additional costs on the part of the business owner, but says it is possible to give employees competitive wages and benefits and still keep your business alive. His Las Vegas deli, which opened in October 2020, is proof.
“We put out a really great product and it’s delivered to our guests with a very high service. My message to everybody is: Give it a try, it actually works.”
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