Minimum wage could max out local businesses

Local business owners and legislators are considering the implications of a federal $15 minimum wage.

Senate Democrats, including Ohio Sen. Sherrod Brown, introduced legislation on Wednesday to gradually raise the federal minimum wage to $15 by 2025. Brown’s office cited sources that say it would affect the wages of an estimated 32 million people.

Gary Dible owns the Biggby Coffee franchise in Bowling Green, as well as in Maumee, with a new one in the works in Perrysburg. While his employees are making over Ohio’s minimum wage of $8.80 per hour, it takes some experience before his employees reach $12 an hour, he said.

“These are part-time jobs, to either get them extra spending money while they are in college, or a second job to help a financial situation, or beer money. It’s not something they are making a living off of, for the majority of my workers. It’s extra income or supplemental income,” Dible said.

He considers work at his coffee shop an entry level job.

“I think it is imperative that people experience an entry level job, to build work ethic, to build customer service, to build responsibility, to build a team aspect,” Dible said. “I think about my entry level jobs when I was young, baling hay. I valued that money because I worked my tail off out in the fields, and then my next job was next door changing oil and greasing semi trucks. I learned a lot.”

Denise Phillips, owner of Gathering Volumes bookstore in Perrysburg, said she also pays her employees more than $8.80 per hour

“I do pay higher than minimum wage currently and I wish I had the funds to pay higher than what I do pay,” she said.

Phillips said she supports the minimum wage increase.

She did run the business on her own for the first year and isn’t afraid to do it again. Right now she typically has two part-time employees at the shop she opened five years ago.

Mike Cousino owns Cousino Restoration in Perrysburg, a construction firm. He said a bigger issue than minimum wage is health care. His employees have higher wage construction jobs and doesn’t think it would have much of an affect on his worker’s pay.

Cousino supports doing something for low-wage earners, but feels that simply raising the minimum wage, without adjusting many other factors, will not solve the basic income problem. He said that both taxes and basic health care would need to be adjusted with a $15 minimum wage and some would then be priced out of the health care market that they currently get.

Dible saw the health care issue from the high school or college student perspective, where most of his employees were still covered on their parent’s health care programs. He agreed that it would certainly be an issue for other age brackets.

“Labor is a big part of my cost. For every dollar I bring in, 20-25% of it goes to labor. Making coffee is a single digit margin business.You can imagine if labor costs increased 50%. It would be huge. I would have to raise my prices. Here lies the problem I see. … Food is a necessity, and even I laugh when some say that coffee is a necessity, but it’s really a comfort food or comfort drink, and I worry. A latte that costs $5 now, and if I need to raise the price to $6, will people stop buying it?”

Phillips, the book store owner, looks at it from the opposite perspective.

“I believe it would help my business rather than hurt my business, in the long run, because I think more people would be able to afford books. I realize there are people who find that buying a $15 book is not always in their budget,” she said.

Phillips doesn’t consider a book a luxury item.

“I would buy a book before I would go out to dinner … but I’m an introvert,” Phillips said. “If the minimum wage goes up we will raise the wages and we will see if people will continue to support the bookstore and if I will be able to continue to do this.”

Dible is also concerned about fairness to his other employees and with relative pay increases to his $9 to $12 per hour pay scale.

“If the minimum increases to $15, for the person who has been with me for four years, does that wage need to go to $19 per hour? I think that is only fair, but how am I going to be able to afford that?” Dible asked.

Like Cousino, State Rep. Haraz Ghanbari, R-Perrysburg considers it a complex issue that might be better solved through different means.

“The $15 minimum wage legislation is being proposed by the other side of the aisle both at the federal level and within the Ohio Statehouse,” Ghanbari said. “During and post-pandemic, I believe it’s questionable to put a further mandated burden of $15 per hour on business owners who continue to face extreme financial hardships due to the shutdown and curfews from COVID-19.”

Last year he co-sponsored the TechCred bill, which was signed into law last year by Gov. Mike DeWine. It helps both workers and business owners with training costs to get employees into higher paying advanced technology fields.

State Sen. Theresa Gavarone, R-Bowling Green, called the $15 rate “really arbitrary,” and added that it would cause a “huge increase in prices.”

“Our minimum wage goes up with the rate of inflation and the voters spoke to that,” Gavarone said.

The rate in Ohio did increase by 10 cents per hour from last year.

Both Gavarone and Ghanbari are concerned that the increase would hit businesses hardest that have already been hit by the pandemic, possibly making the breaking point.

“It would be a big adjustment for the business community,” Gavarone said. “I’m looking at some of the businesses that pay minimum wage and they have been hit hard by the pandemic.”