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Con: Businesses fear $15 hourly wage will cut into already thin profits
Even business owners who would be exempt from Proposition 1 fear the measure to increase the minimum wage to $15 an hour in SeaTac would force them to raise wages to compete for good workers.
Seattle Times staff reporter
When Brett Habenicht was a kid, his first job was bagging groceries for $1.75 an hour.
“It didn’t take long for me to figure out that was not what I wanted to do with my life,’’ he said. Habenicht became a coffee roaster and co-owner of a Quiznos sandwich shop at Seattle-Tacoma International Airport.
Minimum wage, he believes, should be a starting place — not a destination — for unskilled employees.
In the median of SeaTac’s International Boulevard, stand signs both for and against Proposition 1, which would give SeaTac the highest minimum wage in the United States.
The minimum wage in Washington state is now $9.19 an hour, but Proposition 1 would increase it for hospitality and transportation workers to $15 in SeaTac. Retail employers with fewer than 10 nonmanagerial employees would be exempt, Habenicht among them.
But like many business owners, he says he believes the increase could still affect him and cut into already slim profits.
About eight years ago, Habenicht bought into the Quiznos store owned by a friend. He said he thought the investment would help pay for his children’s college. The profits, however, have been low — sometimes $1,000 to $2,000 a month, he said.
If Proposition 1 passes, he fears it could cause the business to go under, not because it would directly force him to increase the salary of his employees — he has only seven — but because he would find it necessary to increase their wages to keep good workers.
“Who wants to work for us when you can walk a few steps down the concourse and work for someone who is not exempt and make $15 an hour?” Habenicht said.
“It definitely is an entry-level job. We’re talking making sandwiches. We try and hire strong candidates. Some have language barriers. We’re more than willing to work with them if the work ethic is there. We understand we are a steppingstone for a lot of these people and if we can help them get some great skills, albeit basic skills, great. We don’t expect anyone to make a career out of making sandwiches.’’
The main financial backing against the proposition comes from corporations such as Alaska Airlines, Filo Foods, BF Foods and the Washington Restaurant Association.
The opposition has formed the group Common Sense SeaTac and it argues that the city would lose businesses and revenue under the proposition.
At Taqueria El Rinconsito, the lunch crowd — police officers, firefighters, business people — fill the tables. Fifteen years ago, Abel Brambila moved to the Northwest from Los Angeles and opened a business in a taco truck. It was a success so he opened a taqueria in Burien. Now he has 17 from Yakima to SeaTac.
At the SeaTac location there are 15 employees. Raising their salaries to compete with a required $15-an-hour wage elsewhere, would be a disaster for the business, said Enrique Islas, a company spokesman.
Even when there are seasonal increases in the prices of food, “We have to keep the prices the same,” Islas said.
Traci Garrett at the airport wine shop Vino Volo also questions how Proposition 1 would affect her business. Vino Volo would not have to pay since the number of employees in SeaTac is 10, but Garrett, like the other business people, fears the indirect impact that might force the store to raise wages.
“Up our pay for employees and that will cut our margin quite a bit,” she said.
Amid the signs advertising airport-related services is an iconic one in yellow, white and black just off what once was called Highway 99. Loren Sisley’s Pancake Chef has been around for 53 years. It wouldn’t be directly affected by Proposition 1 because it is not located within a hotel or public facility.
Twenty-five full- and part-time employees make a base wage of $9.19 an hour, but with tips the income is from $20 to $25 an hour, he said.
While Sisley, who has owned the business for 40 years, understands and sympathizes with what Proposition 1 is trying to accomplish, he doesn’t support it as written because it doesn’t take tips into account in calculating wages. If he chose to raise salaries, then with tips included, his wait staff would make about $30 an hour, he said.
The cooks, who don’t get tips, already make about $15, a higher wage than the wait staff to compensate for a lack of tips. If he had to increase the wait staff’s basic salary, he’d have to increase the cooks’ as well. He’d also like to see the proposition exclude teenage workers.
“My hourly labor costs with benefits are right at 50 percent of every dollar we take in,” Sisley said. “You add the price of food, utilities and rent, and there is not much left for salaries.”
Nancy Bartley: 206-464-8522 or firstname.lastname@example.org
Information in this article, originally published Nov. 1, 2013 was corrected Nov. 2, 2013, .A previous version of this story did not make clear that Taqueria El Rinconsito and Pancake Chef would not be directly covered by the measure that would raise the minimum wage to $15 an hour for hospitality and transportation workers..