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Last Friday morning at Edwardo’s Pizza and Subs began with the usual chores of mixing the dough, slicing up fresh vegetables for the lunchtime salad bar, as well as a conversation about the potential effects of a minimum wage hike in Kentucky.
Owner Dave Richmond, who opened Edwardo’s four years ago, sat in the quiet Lawrenceburg restaurant, empty except for the employees busy preparing for the anticipated lunch rush a few hours later.
To be honest, Richmond said, he hasn’t been concerned about renewed conversations about increasing the minimum wage for American workers.
Many of his employees — with the exception of servers and a few staff — make above the current set minimum wage, Richmond.
Yet, any increase to minimum wages rates would have a big impact on the business of feeding hungry Lawrenceburg customers at Edwardo’s.
“I’m not against, you know ... I’m all for people being able to make money,” Richmond said, adding he was generally in favor of an increase to the minimum wage. “The ripple effect, of course, will be affected in prices.”
In the hopes of causing a positive ripple effect for employees living on minimum wage salaries, Kentucky lawmakers recently introduced a House bill to address what they see as a pay inequity in the state.
According to the Bureau of Labor Statistics, more than 600,000 Kentuckians out of 1.76 million workers earn on average less than the proposed $10.10 per hour minimum wage increase. Many of those workers hold jobs such as food preparation and service, waiters and waitresses, cashiers and childcare workers, according to the same labor statistics from May 2012.
Thirteen states, including Kentucky’s northeastern neighbor Ohio, will have increased their minimum wage rate above the federal level by January 2014, according to an article in USA Today.
Minimum wage increase isn’t just a conversation happening state by state.
According to a Jan. 16 report by the Washington Post, President Barack Obama is currently weighing executive action to raise the wages of workers employed by federal contractors, which may have a ripple effect in increasing the minimum wage for all American workers — including Kentucky.
The last time the state increased the minimum wage was back in 2009 from $6.55 to $7.25 in compliance with a wage increase at the federal level.
Kentucky House Speaker Greg’s Stumbo’s plan, introduced in House Bill 1 on Jan. 1 and to the legislative body’s Labor and Industry committee on Jan. 8, would raise the minimum wage to $8.10 by July 1 of this year, followed by an $1.05 increase in 2015 and another hike of 95 cents by 2016 for a final minimum wage of $10.10.
Stumbo’s plan, which echoes a federal minimum wage increase proposal that would also be implemented over three years, has met opposition from those who argue the raise would negatively affect small businesses.
Those in favor of the state or federal increase maintain more money for employees means more spending at small businesses, and perhaps a more robust economy.
The potential reach of the wage increase on small businesses like Edwardo’s is what concerns Richmond.
“What a lot of people don’t understand — that don’t have their own business — it’s not just a fixed $2 cost perk,” Richmond.
Richmond explained that the increase to a business owner’s payroll wouldn’t just be limited to the $2.85 difference in base hourly pay, but there would consequently be increases in taxes and benefits for workers as well.
If Richmond was forced to choose between an inexperienced worker requiring a higher base pay versus a more experienced worker earning an hourly rate slightly above minimum wage, Richmond said he may find himself choosing the more experienced workers and fewer young, new hires.
According to Richmond, he currently staffs the restaurant with 27 employees, and roughly 10-12 servers take home less than the minimum wage per hour.
Staff that receive tips follow different rules when it comes to pay, Richmond said. According to the Department of Labor, the minimum cash wage for employees that take home more than $30 in monthly tips is $2.13, same as the national rate.
Most employees besides serving staff, Richmond said, earn anywhere from $7.75 to $9 per hour.
Jarek Clark, a 29-year-old kitchen manager at Edwardo’s with more than 13 years of restaurant experience, said he believes an increase to the minimum wage would give workers a better quality of life.
“Money just doesn’t get you very far these days,” Clark, who disclosed that he earned above the hourly minimum wage and worked full-time at the restaurant said.
“It gives everyone a better incentive to get up and be happy to go to work, to take pride in what they do.”
Chad Ledesma, a full-time Bluegrass Community and Technical College student and full-time waiter at Edwardo’s, said he takes home roughly $330-400 per week, but is still living mostly paycheck to paycheck.
“I believe that minimum wage should rise with the cost of living, but I believe people should also work,” Ledesma, who is going to school for construction technology, said.
Ledesma, a husband and father of two boys ages 5 and 7, said he’s in favor of raising the minimum wage, but that education is key to improving the quality of life.
“People have to realize you can’t just expect,” he said. “We’re a society that expects, we’re ‘owed,’ but I also believe people should work.”
The restaurant industry is where many teenagers start their first job, Richmond said, because of the emphasis on developing customer service skills rather than expected technical abilities.
That may change with a future minimum wage increase.
“I think what we’ll see is, I don’t know that you would want to hire someone who has less experience, you’re going to look for a better qualified employee,” he said.
Richmond said he’s in favor of increasing minimum wage for workers, but that in order to do so, he couldn’t operate the restaurant at a loss.
“If we can get people to make more money, that’s great. But in order to do that, we’ll (the restaurant) have to make more money.”
Ideally, a minimum wage increase would put more money in the pockets of workers, Richmond said, who could then afford to spend a portion of their pay at small businesses like Edwardo’s.
That remains to be seen, Richmond said.
“I just wait, not that I don’t care, but me worrying about it isn’t going to change anything,” he said. “I’ll deal with it when it gets here… I’ll keep moving forward either way.”