Progressive small-business owners in Chicago voiced their support Monday for raising the minimum wage, but most said the move would still cost them.
They agreed that neither they nor their employees can live on minimum wage, especially if they live in Chicago, and that it’s essential to have “happy” employees. Satisfied employees are productive, more loyal, stay on the job longer and have no need to report to work exhausted because they’re working second and third jobs to pay the bills, said the seven small-business owners who spoke Monday at Mayor Rahm Emanuel’s invitation during a roundtable at Dimo’s Pizza in the Wicker Park neighborhood.
Emanuel set the stage to rally support for his proposed ordinance, to be introduced to City Council on Wednesday, to boost the city’s minimum wage to $13 an hour by 2018. The minimum wage currently is $7.25 an hour at the federal level and $8.25 in Illinois.
Emanuel’s proposed ordinance also calls for a $1 increase over two years in the minimum wage governing tips — from the current state minimum of $4.95 — and for the local minimum wage to retain existing state exemptions for workers under 18 and individuals undergoing training, among others.
The business owners at Monday’s roundtable struggled with the implications of such a move, even though they said they support it philosophically and already pay their employees more than minimum wage.
“The [food and grocery] industry is in chaos, and I don’t know how an increase will impact the way I hire; I may not hire as many people,” said Carmen Maldonado, president and CEO of La Criolla, a spice company that has been a West Loop stalwart since 1957. The company, which imports, manufactures and distributes more than 200 foodstuffs to grocery stores, employs 25.
Maldonado, who said she has always paid her employees above minimum wage, nevertheless worries that a city-mandated wage increase could hurt her longtime, independent-grocer clients — the ones she calls her bread and butter. The independents, companies such as Tony’s Finer Foods, buy La Criolla’s spices, beans, pastas, olives and other foods, and compete with bigger, discount chain stores.
“I cannot raise [my] prices as quickly on the independent customers,” Maldonado said, noting that the industry operates on razor-thin profit margins. “A minimum-wage increase would affect everything.”
Yet she said she hopes her company — her late husband, Avelino,started the business selling spices out of the trunk of his car — can keep increasing revenues by doing business with the specialty, high-end boutique groceries moving into Chicago to appeal to health-conscious young people.
Kimberlee J. Burt, owner and play-and-learn leader at “A Child’s Space” child care center in the South Loop, said she must justify any tuition increase she passes on to parents.
“Parents already struggle with paying for child care,” she said. “It’s something we’d have to consider, since [a minimum-wage increase] would affect our costs. I have to be able to counter by explaining to parents, ‘What more are we offering’ ” to the children.
Burt pays her 11 employees — nine full time and two part time — a median average wage of $11 an hour, and last year she started offering health care insurance coverage. The 12-year-old child care center enrolls 45 students ages 6 months to 6 years; 75 percent of the children are under 3.
Colleen Kramer, president of Evergreen Supply Co., an electrical supply firm at 9901 S. Torrence Ave. on the far Southeast Side, said she would prefer that the minimum wage be raised at the federal level so that companies both in Chicago and in the suburbs would compete on an “even” playing field.
“Every person should earn a livable wage,” said Kramer, whose mother, Patricia Gallagher, founded the company in 1986 in the basement of Gallagher’s Oak Forest home. The company, which has operated in Chicago for 15 years, employs 42. Its wages range from $10 an hour for an hourly worker to “six figures” for commissioned salespeople, Kramer said. The company matches employees’ 401(k) contributions up to 4 percent.
If Chicago-based companies must pay a higher minimum wage than their suburban competitors, the city businesses should get some kind of preference, perhaps for city contracts and related work, Cramer said.
Rebecca Mojica,owner, founder and creative guru at Blue Buddha Boutique in Edgewater, said her employees would have a say in how the retailer raises their pay, which would go up even though no one makes as little as minimum wage.
That’s because she runs an “open book” company in which employees make communal decisions on issues such as increased expenses of doing business. One idea would be to increase the company’s pool of on-call employees willing to work four to six hours a week, Mojica said.
The boutique, which teaches people to make “chainmaille” jewelry — an art form made of small metal rings linked together in a mesh pattern similar to medieval knights’ armor — pays an average $10.50 to $11 an hour to part-time employees and $14.19 to $16.98 an hour to full-timers. It employs 13 full-time and five part-time workers. The company does 95 percent of its business online, offers classes and sells jewelry-making tools and kits at its brick-and-mortar site.
Yet Mojica concedes there are lots of fears and unknowns, especially for mom-and-pop businesses that, though they may be exempt because of their size, will face challenges in hiring good people if they keep their wages lower than mandated.