Businesses See Benefits in Livable Wage

By Dan Gearino on Wednesday, June 2, 2004.

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Earlier this spring, New Hampshire lawmakers voted down an increase in the state's minimum wage.

The bill would have raised the minimum to $6.65 an hour over the next two years.

Opponents argued the bill would hurt area businesses.

But a growing number of employers in New Hampshire and Vermont are finding that higher wages don't have to hurt the bottom line.

The Keene Sentinel's Dan Gearino reports on several businesses that are paying what's called a living wage.

(Bank sound)

Wanetta Powling likes her job. She?s been a receptionist at Brattleboro Savings and Loan for nearly three years.

Shortly after she was hired, the bank started a living-wage policy and it set the minimum pay at $10.25 an hour.

These days, no one works at bank for less than $10.70 an hour.

The bank says the policy has been great for business.

And Powling certainly isn?t complaining.

Wanetta (13): I worked at convenience stores doing fast foods ? very low pay, unappreciated service. They treated you very much like work mules. Once you?re used up you?re no good. But it?s not that way here. I don?t feel that way at all.

The bank is one of a small, but growing, group of businesses that are paying above the standards of their industries.

Executives at the businesses say higher pay helps recruit and retain workers.

It can also improve a company?s public image.

Bank president George Haynes.

Haynes2 (14): When you pay a livable wage, particularly on some of the lower graded positions in the bank, you also attract a higher caliber of employee. Those are the type of people you want to hire and you want to retain and those are the ones that generally provide the best customer service.

But some observers question the wisdom of such wages.

N.H. House commerce committee Chairman John Hunt of Rindge thinks across-the-board pay hikes could be bad for business.

Hunt1: Any employer wants to pay their employees more money. It?s just that you can?t afford it.

Hunt, a Republican, is also the former co-owner of a computer retailer in Keene with 100 employees.

When he owned the business, the lowest-paid workers had little potential for long-term pay raises.

He says this was to encourage them to move on to more challenging jobs in the company.

Hunt2: Each job actually has a limit to how much that job is worth. And to simply go across the board and say we?re going to give everybody an increase doesn?t make sense because you could have a job where that person just needs to move on.

So what is a living wage?

It?s often defined as the amount of money needed for a full-time worker to support a family.

But definitions vary, as do the costs of living in different regions.

So it's tricky to calculate a living wage.

Back in 2001, the Brattleboro bank borrowed its $10.25 per hour figure from Cambridge, Mass.'s living wage ordinance for city workers.

Lynn Davis was hired as a bank teller after the wage policy started.

Davis1 (20): My mother?s been in banking a really long time and I wanted to get into banking. She said this is the best bank to go to. And so I came and applied here. I also saw ads in the paper about living wage and thought, wow, if I could actually make something I could live off of, that would be nice.

For the bank, paying the living wage wasn?t a huge stretch.

It's lowest wages weren't that low.

But paying a living wage could be more difficult in industries like fast food where workers get paid about $6 an hour.

But that's not stopping one fast food business.

Bagel Works, based in Keene has about 80 workers at four locations.

The starting wage is more than $9 per hour.

Company president Richard French says at those levels, a full-time employee can afford an apartment.

At places that pay less, employees have to work another 10 to 20 hours per week to earn the same amount.

French1: I know that when I work 50 or 60 hours per week I feel pretty tired and pretty worn out. So to be forced to work 80 hours per week to afford an apartment is totally unreasonable.

French believes the higher wages are easily paid for by reduced hiring and training costs.

Some business owners may find that hard to believe.

But Donna Simons is convinced.

She?s a board member of a downtown Brattleboro business group. She also co-owns A Candle in the Night, a store that sells imported rugs.

She pays a living wage to her two employees and thinks larger companies should take a lesson from businesses like the bank and Bagel Works.

Simons (20): When you can offer a living wage, the quality of your employees rises and I think they have more appreciation for you as an employer and are willing to stay on the job longer. I think that is extremely important. Over the long run, you save money.

Lynn Davis at Brattleboro Savings and Loan is proof of that.

Davis says the wage policy has improved the quality of life for her family.

And she's convinced it's the right thing to do.

Davis2 (7): Since I?ve come here for the first time in my life I have a savings account. My family?s able to go on vacation. It sounds kind of funny ? but we?re going to Disney World!

For NHPR News, I?m Dan Gearino in Keene.