LA GRANDE — Local business owners have mixed feelings about Oregon’s fast approaching minimum wage jump.
The increase is set to take effect July 1 when the minimum wage in the state’s non-urban counties, which includes all of those in Northeast Oregon, will jump from $11 an hour to $11.50 an hour.
The jump is part of a series of 50 cent per hour minimum wage step increases the Legislature put in place when it passed Senate Bill 1532 in 2016. The annual increases will continue each year through 2022. The raises are being made throughout the state and are roughly based on geography.
Sandy Sorrels, owner of Ten Depot Street restaurant in La Grande, strongly opposes the increases, particularly the upcoming one.
“I think that the Legislature does not realize how hard this hits small businesses in Eastern Oregon. Especially now (because of COVID-19 driven recession), it is crippling,” Sorrels said.
Sorrels noted the Oregon Restaurant & Lodging Association is attempting to get the Legislature to delay putting the minimum wage increase into effect. Representatives of the association are trying to persuade lawmakers to postpone the increase during the special session, which was to start Wednesday and is set to end Friday.
The La Grande restaurant owner said she believes the state law raises the minimum wage too quickly. She said this prevents business owners from being able to make up the difference by raising prices. Sorrels noted if a minimum wage increase forces her to raise the price of a hamburger to $15, diners will shy away because they are not accustomed to paying that much for the entrée.
“They will go someplace else or find something cheaper on the menu,” Sorrels said.
Beau Willadsen, owner of the La Grande McDonald’s, will not have to worry about raising the minimum wage his restaurant pays. Willadsen boosted his restaurant’s minimum wage to $11.50 an hour on Jan. 1, six months before it was to become mandatory. He said he was inspired to do this because it would help him recruit more employees before summer hit, a time when it is hard for him to hire staff.
Willadsen also made the Jan. 1 move because he wanted to give his employees a boost.
“I’ve been more fortunate than most, and I have no problem paying them more,” Willadsen said. “They have challenging jobs and work hard.”
Fred Bell Jr., who owns La Grande’s Shortstop Extreme with his wife, Tara, said the minimum wage increase will not have a big impact on his business.
He explained only a small number of his employees are paid minimum wage. Bell said he views the minimum wage increase as a cost of living boost and is glad it will help workers.
Marco Rennie, the owner of Market Place Fresh Foods in downtown La Grande, said he opposes the state’s significant minimum wage increases because of the effects they have financially.
“I don’t like it for business as a whole,” he said. “It will continue to be a strain.”
Rennie said he believes the increases prevent young people from developing their full potential.
Rennie noted when he was growing up as part of the baby-boom generation, it was easy for teenagers to get jobs, which allowed them to develop work ethics, values and skills that help them succeed in the workplace. But today, he said, the increases in the minimum wage combined with federal laws make it more difficult to hire teens for many jobs.
Market Place Fresh Foods has only a handful of employees who receive minimum wage.
“Most of them are college students putting themselves through school,” Rennie said.
Sorrels said she sees a touch of irony in the mandatory wage increase. She explained Oregon is one of the few states that requires employees, such as waiters and waitresses who receive tips, to also get mandatory minimum wage increases. But waiters and waitresses are less in need of wage increases because they often receive $20 or more an hour in tips. Waitstaff make up about 40% of Ten Depot Street’s minimum wage employees.
Sorrels also noted she cannot afford to give pay raises to deserving non-minimum wage employees, including cooks, because she is required to provide money that would have gone to them to other staff for their minimum wage pay boost.
Sorrels said she is considering addressing this by having customers pay a service charge in lieu of giving a tip. Money from the service charge could be used to provide pay increases to all of her employees. Sorrels said customers upset with service could choose not to pay the charge. Cities where many restaurants have service charges in lieu of tips include Portland, Seattle and Pullman, Washington, the restaurant owner said.
If a service charge at Ten Depot Street were put in place, Sorrels said her customers still would have the option of providing a gratuity by depositing it in a tip jar.
Sorrels said the rising minimum wage increases she has to pay are taking a financial toll. She noted before the increases started almost four years ago she had a reserve fund she could draw upon for emergencies and to make building improvements.
“Because of the minimum wage increases, I have used up all of my reserves,” she said.
The minimum wage increases outside of non-urban counties that take effect July 1 will be 75 cents per hour. They will raise the minimum wage to $13.25 inside the Portland urban growth boundary and $12 per hour in about 15 counties in Western and Central Oregon, according to the Oregon Employment Department.