Workers and Businesses Benefit from a Higher Minimum Wage

by John Pepper on August 7, 2014 · 6 comments

Editor’s note: The following guest post is authored by John Pepper, the co-founder of Boloco − a burrito chain that pays starting wages above the federal minimum of $7.25/hour. Employees make about $12/hour on average. Join the conversation on Twitter using #RaiseTheWage.

In early June, Seattle took a big leap forward by gradually moving the city’s minimum wage to $15 per hour by 2017. This followed state minimum wage increases in Connecticut, Maryland, and Hawaii to $10.10 per hour. In late June, Massachusetts, where Boloco has the majority of its restaurants, committed to $11 per hour by 2017, the highest so far of any state in the nation.

When I was asked by Fox Business one year ago to speak about the minimum wage, I was fully focused on raising wages as a powerful tool to hire and retain the best people in the industry:

“We want to look back in 10-20 years from now… and know we were one of the few businesses that did the right thing for its people, and in the process built great, responsibly profitable businesses by helping people. As opposed to doing everything possible to keep wages down, we’re constantly looking for (operational) practices that drive wages up.”

Secretary Perez learns how to make guacamole during a visit to Boloco Aug. 7, 2014.

Secretary Perez learns how to make guacamole during a visit to Boloco Aug. 7, 2014.

Since then I’ve left Boloco, and as far as raising the minimum wage goes, I’m applauding loudly and frequently. Why?

First, taking what is perceived to be significant business/economic risk on behalf of the well-being of so many low-income, but often hardworking people is the kind of risk that will be looked back upon positively in the decades to come − almost as though all of this was a no-brainer. The gap between the lowest and the highest wage earners today is insane, and by many expert accounts the middle class is disappearing rapidly. So yes, raising the minimum wage is very good for workers and the strongest step forward for the low-income worker that has taken place since I started our business over 15 years ago.

Second, I do believe that many, many good businesses will benefit from a higher minimum wage, especially as time passes and the initial fear and overreactions subside. It’s true that it will sting some businesses at first, and even force some who were already struggling to close their doors permanently. But here’s the thing about that … I’ve always felt that if a business, including and especially my own, couldn’t afford to pay its people at least a living wage, we weren’t earning the right to be in business anyway.

And when a business claims that the only way it can pay its operating expenses and stay open is by paying its people so little that they can’t pay their own basic expenses, well that business isn’t really in business anyway. The other thing about this is that if your people can’t manage their basic financial obligations, part of their “life job” is to constantly and somewhat aggressively look for a job other than the one you are providing them. They are always working for you with one foot out the door and waiting for someone to come knocking with an offer of an additional $0.50 an hour. Paying workers more gives them the mental bandwidth to focus on doing a better job for you, and perhaps even quit the second job that was required to pay the bills. When you ask them to buy into your culture, your customer philosophy, and do a little extra to help get better business results, they may actually be willing to do it and we will all benefit.

 

{ 6 comments… read them below or add one }

1 R Quinn August 7, 2014 at 7:38 pm

That’s all well and good, but if the minimum wage is increased for all you lose your competitive advantage for hiring and must then raise the wage again to get it back eventually raising prices to cope. More important, is our goal to keep people treading water in low paying, low skill jobs? Is it an overall good thing to encourage people to stay in one of your jobs for 900 days as it says on your website? Do we want a step forward for low income workers or to allow and encourage individuals not to be low income workers?

2 Michael Brady August 7, 2014 at 10:47 pm

I’m sure this will help the economy. How about we leave the contract between employee and employer, and leave the iron-fisted hand of .gov out of it?

3 Michael E Steen August 8, 2014 at 8:39 am

Apparently no one with DOL or the Executive Branch comprehends the fact that the company’s which pay more than the minimum wage only have an employee retention advantage because they pay more than the minimum wage. If the minimum wage is increased to $10.10, there is no longer an advantage unless these companies pay proportionately more than $10.10 per hour. Obviously, employees making $10.10 per hour (whenever every other employer is paying $10.10/hr) will now be looking for employers paying more than $10.10/hr. Obvious to anyone but the DOL or the Executive Branch.

4 Sanford Trado August 8, 2014 at 2:41 pm

Interesting article…however, how much more does their Buritto cost than their competitor? Eventually, the higher wages will make its way into the price of the Boloco buritto. Will the average consumer be willing to pay the higher price for a Boloco burrito vs their competitor’s who does not pay $11 an hour for labor? In theory all sounds good and fair. However, in practice it does not quite work out the way one would think.

5 Bruce August 8, 2014 at 5:18 pm

After great 10 per hour, it is time to upgrade EEO and special strength for college graduates disability people.

6 Bruce August 8, 2014 at 5:25 pm

For 24 years, I have been trying to use Federal and State Special Disability Employment Programs with no success that includes Calif. LEAP, Ticket-to-Work Program, and Schedule A; applying to Federal EPA, California Air Resources Board, Soc Security Administration, and other agencies. I face employer barriers and discriminations against individuals with disability epilepsy in our land of equal employment opportunity

The Federal Schedule A Employment Program is a noncompetitive and the hiring authority can use for agencies to promote (only helps or encourage) hiring individuals with disabilities but it is very common the hiring authority not use Schedule A. Schedule A is an excepted service hiring authority available to federal agencies to hire and/or to promote individuals with disabilities without competing the job.

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