Are We Willing To Pay If The Minimum Wage Is Raised?

May 29, 2019

This week, as lawmakers consider a bill that would raise the state’s minimum wage above the current federal minimum, we're profiling people for whom the law would have the biggest impact. Workers stand to benefit from a raise in pay, but employers may see their labor costs rise. 

Richard French owns The Works Cafe. He’s got locations in New Hampshire, Massachusetts, Maine and Vermont, and he keeps track of the average wage in each of those states.In New Hampshire, it’s $12 an hour. In all the others, it’s $13.

“Unequivocally our New Hampshire stores are paying 9 % less than surrounding or abutting New England states," he says.

On the day I stop by the Works in downtown Concord, customers are lined up for the food—bagels, quinoa bowls, salads with store-made dressing. Employees bustle about, chopping vegetables and making sandwiches.

French says this kind of work generally isn’t very well-paid.

"I would say almost 80 % of all food service are living check to check," he says. "I've never pressed that number. Is it 83? Is it 78? It’s a huge percentage. And for those of us who haven’t seen it from their standpoint, we’re being blinded."

French has taken steps to offer competitive wages, based on each market where he has cafes.  New Hampshire is the only market where the minimum wage remains at the federal level—$7.25 an hour.  Here, French’s lowest paid workers make $9 an hour, although most make more than that. Some employees get health insurance and a cut of whatever’s in the tip jar.  He knows some still struggle, so he’s set up another benefit for his staff: an interest-free loan program.

“It’s one of our most-used benefits. And that’s saying something. They need to take out a loan if their car breaks down and they need a new muffler or new tires.”

It’s easy to imagine why someone in French’s position would want to stick with the federal minimum. If costs are lower, it makes sense that a business owner would want to keep it that way. But French says passing a law in New Hampshire that forces all shops like his to adjust wages up would be a good thing. 

“If it’s a forced mandate, then everyone’s going to go up. All of our competitors will go up. It will force the water to rise, and the water to rise to me means pricing—in the retail environment, in the restaurant environment," he says.
French says with a gradual raise to $12 an hour, as bills in the legislature propose, there would be time for customers to adjust to slow price increases that would result.

“And so I think the big question for us is: are we all willing to pay a minimum 10 percent more for folks in this industry to be able to participate fully in our society?”

And French says he hopes the answer is yes.