Hey guys, Illinois is considering a minimum wage increase to $10/hr! Not only is this asinine, but it could force us to close 2 locations.
Right now our food and labor costs are right where they should be for a small business. We pay employees depending on their work ethic, experience, tenure, etc. $10/hr to employees working 2-3 days a week who don’t have any experience or it’s their first job is ludicrous.
Can you all please take a few seconds and sign this petition for me? If the law passes, it will cause small business closures, job loses, inflation (that extra $1.75/hr has to come from somewhere), etc.
Thank you SO much for your help! Please help a fellow pizza shop owner in Illinois out!
Petition —> http://www.change.org/petitions/illinoi … imum-wage#
Thank you so much. I appreciate you sparing a minute to help out a fellow shop owner far away from you!
Good lookin’ out!
Brandon, I’m hesitant to sign anything generated by change.org, but I will certainly send my reps. my thoughts on this issue. I’d strongly suggest that even if you get a great response on your petition, to urge everyone to write, or email their congressmen/women. From experience I know that while lots of names on a petition are impressive, a stack of individual letters from small business folks carries more weight in Springfield.
Currently, Washington state has the highest minimum wage in the nation (at the state level) of $9.04/hr. It is set to increase annually based on the cost of living increase.
This really does defy any logic.
What happens when wages go up? Businesses cannot simply continue to eat this cost and pass it on to consumers, they have to raise their prices. This in turn negates the increase in wages and the workers are right back with the same purchasing power they had before the increase.
So why does government REALLY do it? Well, they are the only one who really benefits from the increase in wages. As wages go up, so do the tax dollars they collect.
The conclusion? The government really cold care less about taking care of low wage workers (or they would find a better plan). What they really care about is increasing their tax base so they can simply go on spending more and more and more.
Our standard cook wage is $10 and most make $11. If this happens it can be survived. Yes, you will have to raise prices. That is not the end of the world. All competitors will have the same issue and will be raising prices too.
It is pretty nuts for states to be doing this though. It tends to kill employment for youth and less skilled workers. Not so much from operations like yours, but from light manufacturing and other areas that can move jobs accross the boarder to Arkansas, Iowa, Missouri, Indiana etc etc
I am having a hard time with Colorado minimum wage of $7.64 let alone thinking about $9 or $10. Unless your in the mountain towns you simply cant justify that right off the street and think about making money.
Colorado is tied to cost of living index as well which seems to me would create a perpetual cycle of raising the wage.
Good luck with that.
We have operated for 13 years now. The lowest wage we ever paid for cooks was $8.00 in 1999 and by 2000 the starting wage was $9.00. In a college town you have an artificially high supply of young people competing for jobs which keeps wages low. Luckily it also creates a lot of demand for pizza!
It cuts both ways, if I had to charge front range discounted prices I would need to be able to hire people for minimum wage. But since none of my competitors can hire people for minimum either, they have to charge higher prices too…
My point is that it all works out.
This is where your business plan has to come into play. Are you operting an 80 hour a week job for yourself with a few other min wage employees or are you going to offer quality produts for fair prices that return a decent profit for you and the business? In the end…the cheap coupon customers will only run you out of business or you will burn out after a few years of 80 hour weeks and no life outside of the shop! Make your place known for high quality food, great service, and at the reality of it all…you cannot do this selling $5-10 pizzas! Running a successful establishment and being able to pay a decent wage that your employees can survive to live off of is not and should not be a problem. You need to step back and really decide on where you want to fit into the food service world and then build yourself around that plan…not just “winging” it as wages or the economy changes. You can weather the extreme challenging times if you prepare and understrand the rollercoaster that business ownership can be.
Unit sales volumn has a lot to do with what prices you can charge. If I could run 300-400 pies per day all year I could easily sell $10 pizza AND pay the higher wages I do.
I also think that occupancy cost needs to be right there with labor and food cost as a key variable that has to make sense of the combination of price/volume.
In an average volume indy store you can not survive price matching with the big guys unless you have extrordinary low rent as they are GOING to have the leverage on food cost and will live by the same labor market realities that you do in the same market. In fact, their labor cost could well be higher than yours.
Don’t get hung up on the percentages I use in this example. The point is that there is more than one succesful combination of factors.
30% food/supplies + 30% labor + 10% occupancy = 70%
30% food/supplies + 28% labor + 12% occupancy = 70%
28% food/supplies + 25% labor + 17% occupancy = 70%
32% food/supplies + 34% labor + 4% occupancy = 70%
Sure, from week to week it is easiest if you have low rent. Once that contract is written, it takes no management skill to keep that number locked in place. And yes, there are additional places like marketing where a lot of dollars are at stake.
I took a few minutes to assume that I had to give a $2.50 raise to every hourly person other than my GM. If I did that, it would add 3 point to labor. I would have to raise the price of every pizza I sell by about 35 cents to cover it. Considering that all my competitors would be in the same boat, it is not something I would lose sleep over.
BTW, don’t take my posts the wrong way. I am NOT in favor of minimum wage legislation. Let the free market rule. I am only saying, that as long as my competitors have to live by the same rules I do not worry about that factor when it comes to my ability to survive.
Totally agree with the certain marketplaces determine the wage scale, but minimum wage has nothing to do with the cost of living.
I also suppose speaking for myself that debt service plays a big role too.
Only position I really underpay compared to my markets is my GM yet they all are very happy and content (or at least they dont want to test the waters in starting over).
Welcome to the real world of wages
We have a minmum wage of around $640 pw now for a 38hr week with 9% Superannuation subscription for anyone over 18 earning $400 + a month.
Min wage starts at $8.80 ph for 15 year old and incresaes to full amount at 20
I get green with envy at your rates
Thats okay, we get green with envy when we see how much you guys can charge for pizzas!