Archive for Monday, May 27, 1996


May 27, 1996


Lawrence employers express few concerns about increasing the minimum wage.

The retail book business may be notoriously tough, with slim profit margins and low wages for workers, but it's not tough enough for Brad Hebel to worry about the increase in the federal minimum wage approved by the U.S. House last week.

Hebel, co-owner of Terra Nova Bookstore, 920 Mass., pays his employees more than the current hourly minimum of $4.25. He declined to say how much more.

"I worked for years for the minimum wage, and I know what it's like," Hebel said. "Minimum wage does not pay a decent living. I don't believe it's a fair salary for what we expect of the people who work here. We expect much more of our employees, and we pay them that."

In the debate leading up to Thursday's 281-144 House vote in favor of raising the minimum wage to $4.75 on July 1 and to $5.15 a year later, House Majority Leader Dick Armey, R-Tex., argued that the increase would kill jobs.

Economists have estimated there are 10 million to 12 million minimum-wage workers nationwide.

In Lawrence, however, most companies already pay more than the federal minimum, said Gary Toebben, president of the Lawrence Chamber of Commerce.

"So the only question for them is whether or not the increase in the minimum wage will then result long term in an across-the-board increase of 90 cents per hour for all employees," Toebben said. "And if that happens, then it becomes an additional cost for companies and it becomes somewhat inflationary for the economy."

Toebben doesn't see the minimum wage increase having any effect on the chamber's efforts to attract new jobs to the city.

Of 330 new jobs the chamber said were added to the local economy last year as a result of its marketing and economic development efforts, the average wage was $12 an hour, Toebben said. The Chamber of Commerce estimates the city added 1,700 jobs last year.

"I would guess that very few of those jobs were minimum wage," Toebben said. "Not only in our community, but across the country, there's a demand for labor. If you pay minimum wage, you in most cases have a difficult time finding the labor you need."

That's true even at businesses long thought of as low-wage employers, like fast-food restaurants. In Lawrence, McDonald's pays minimum wage to workers younger than 16 but at least $5 an hour to those who are older, said Sherri Baker, a manager at the McDonald's at 911 Mass.

The average wage there is about $5.15 an hour, Baker said.

Employees at Hastings Books Music and Video, 2000 W. 23rd, earn at least $4.90 an hour, said Toby Stoner, a manager there.

"I think it's an attempt to get better quality employees," Stoner said. "Other places in town will pay more so that they can get the better picks out of the local pool. It's still not a wage anyone could actually live on. No one could raise a cat and a scrawny mouse on that kind of pay."

Today's minimum, $4.25 an hour, translates to $8,840 a year for someone who works 40 hours a week.

"Nobody can live on that and have any kind of life," said a 26-year-old minimum wage employee at a Lawrence coffee shop.

At $5.15 an hour, the minimum wage will earn a full-time worker $10,712 a year.

Now the Senate will consider the increase.

"It's virtually political suicide if they don't approve it," Stoner said. "Their justification for holding it back is pretty weak. It's a non-issue. I would imagine it would be an issue if they voted it down. If they vote it down, I would think they might as well start jumping off the building. They might as well put in a diving board on the Capitol dome."

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