With all the talk about raising the minimum wage, I thought I would weigh in as an employer whose payroll almost doubled overnight.
In 2014, I was the owner of a combination café/laundromat/comedy club in downtown San Francisco. A referendum was placed on the ballot to raise the minimum hourly wage to $15. My first reaction was panic. In an industry notorious for razor thin margins and plenty of competition, I was not sure that I would be able to survive. But, considering it was San Francisco, and despite a massive campaign launched by the Golden Gate Restaurant Association against it, there was no doubt in my mind that the referendum would pass.
So, like any business owner, I grabbed my calculator to come up with a solution. What I determined was that if customers who came into my business paid a modest average of 50 cents more per visit, it would be enough to cover my increased payroll expense. Assuming the other business owners in my neighborhood would reach a similar conclusion, I realized that mitigating the effects of a $15 wage would not be as challenging as I first thought. To the dismay of the GGRA, I wrote a letter in the San Francisco Chronicle advocating for the increase.
A funny thing happened after passage and implementation. I noticed that my 20 employees were collectively in a better mood and less stressed. I was pleasantly surprised when other service workers in the neighborhood who previously could not afford the luxury of a latte or a beer after work were becoming my customers. Rather than marking the end of my business, 2015 was a record year for sales and profits.
And all those predictions of job losses and business failures never materialized.
A century earlier, one business owner predicted that if he raised the wages of his workers, they would become his customers. He was right, and his decision marked the beginning of the American middle class and a period of unrivaled prosperity. Now, as income inequality is at record levels, isn’t it time that we all adopt the wisdom of Henry Ford?