Archived Story

Wage increase affects A.L. business

Published 1:00pm Sunday, August 3, 2014

Albert Lea businesses are sharing mixed opinions of the new minimum wage increase that went into effect Friday.

While some said they don’t anticipate any impact from the increase, others said it will be a challenge for their business.

“That’s a lot of money to be throwing around, and now we have to find ways to make up for that loss,” said David Mord, general manager of the Green Mill Restaurant.

Whether it’s menu prices or other costs, he anticipated costs for the consumer to increase.

It is the first time in nearly a decade that the wage has increased.

The hourly wage moves from $6.15 to $8, the first in a series of steps that will eventually set it at $9.50 an hour for big companies, including those with gross annual sales topping a half-million dollars. Smaller companies phase up to $7.25 an hour next year, which is currently the federal minimum wage, then $7.75 by August 2016.

And starting in 2018, the minimum wage is indexed to inflation, which likely means automatic raises.

Mord said at the Green Mill, this will affect about 25 employees — basically all of the serving and host staff.

He said Minnesota is one of only a few states in the country that does not allow tip credits. Typically, servers make less money for a starting wage and then make up for the difference in tips.

Kevin Kiser, general manager of the Freeborn County Co-Op on Margaretha Avenue, said he didn’t think the minimum wage increase would have any effect on his business. All of his employees are being paid more than minimum wage.

The same was true for Casey Connor, manager of Market Place Foods.

He said only a few of his employees make less than $8 an hour, so it would not have a big impact on the business.

“To get somebody good, you’re already paying that now,” Connor said. “I don’t think it’s going to affect drastically anything too much.”

He said Market Place Foods has been able to find better employees by paying them a little more.

Randy Kehr, executive director of the Albert Lea-Freeborn County Chamber of Commerce, said he is hearing mixed reaction from other chamber members.

“There are so many people who aren’t affected and others who are,” Kehr said.

He noted there was more discussion when the issue was before the Legislature, but it appears businesses have resigned to the changes.

Some are more concerned with the long-term impact.

“Is there a domino effect going up?” Kehr said. “All of that is still kind of to be determined as things play out.”