Retailers weigh in on effects of rising minimum wage

Home Featured Post Retailers weigh in on effects of rising minimum wage

By Ken Ryan This year more than 20 states will see increases in minimum wage for workers. Most of these changes took effect Jan. 1, although some states—including Connecticut, Nevada and Oregon—will see increases later in the year. Florida will join them in September.

The hikes prompted the World Floor Covering Association (WFCA) to remind flooring retailers that just because they pay more than minimum wage doesn’t mean they can ignore the increases. In a release, the WFCA said it is important for flooring retailers, contractors and installers to be vigilant in determining whether their state or local governments have increased the minimum wage and whether that increase stands to impact other salary requirements.

FCNews contacted more than a dozen flooring retailers in states that are seeing minimum wage increases. The response ranged from indifference to annoyance, with some saying that while the hike has virtually no impact on their business structure today, that might not be the case with subsequent wage increases.

“The minimum wage increase will have little or no effect on Myers Carpet Company,” said Rick Myers, owner. “No one at our Atlanta or Nashville locations makes less than $15 per hour. There are very few summer jobs for students or employee’s children we have that pay less than $15, but that should not change things very much. It will have no effect on our commissioned salespeople.”

Most dealers said their sales and administrative teams are compensated well above minimum wage. In some cases, retailers offer a variety of pay structures, including commission-only, base vs. commission and salaried or some combination thereof. Craig Phillips, president of Barrington Carpet, Twinsburg, Ohio, said the minimum wage increase of $0.10 to $8.80 per hour in his state “will have no effect on our family of companies’ compensation structures.”

Likewise, Tim Schoolfield, owner of CountrySide Flooring America, O’Fallon, Mo., said the increase will not hurt his business. “In my opinion, this will have little impact on CountrySide and our region. Missouri minimum wage is $10.30 and the starting pay of nearly all jobs in this area is higher than that. In fact, the starting pay for entry-level fast food and gas station positions in this area has been in the $10.30 range for quite a while. To get any level of a capable and competent employee requires—and has required—more than $10.30. However, when you get to $15 per hour, that’s a different story.”

In California, the minimum wage increased by $1 to $14 an hour—the highest in the nation. Napa, Calif.-based Abbey Carpets Unlimited pays its employees on an hourly basis and all are paid well above the new minimum wage requirements, according to Janice Clifton, owner. “So, it will not impact our store directly,” she said. “I’m sure there are many costs that will increase due to the minimum wage requirements but none directly.”

Trickle-down effect

Florida recently increased the minimum wage by 9% to $8.65 an hour. However, this will not be the only minimum wage hike in the state for 2021. In November 2020, Florida voters passed a Constitutional Amendment that will gradually raise the minimum wage to $15 per hour by 2026. Specifically, the state minimum wage will increase each September—it will reach $10 in September 2021 and increase $1 each subsequent September.

Some retailers voiced their displeasure with the situation for what it portends for the future. John Taylor, owner of Taylor Carpet One Floor & Home in Fort Myers, Fla., said the minimum wage issue is of great concern to most small business owners. As he explained, “The effects will ultimately result in both price increases and, in some cases, us doing with less people to get our work done. We are in a highly competitive market, so to maintain our competitiveness we will really have to evaluate our options. In Florida, it will be phased in over a number of years, so we will have time to work through it. In our opinion, it will also have a major effect on existing employees who we feel will want to have increases in similar proportions, and this just compounds the issue.”

In nearby Port Charlotte, Fla., Marjorie Benson, president of Friendly Floors, noted her disappointment in the new wage increases that passed in Florida. “I believe it is going to impact many businesses, then the overall economy in the long term,” she explained. “This minimum wage increase will not affect my employees or Friendly Floors and our payroll because of the structure of our compensation; I am thankful for that. But I am definitely concerned about the trickle-down effect of what it will do to small businesses overall.”

Retailers in other states are also looking longer term. For Carlton Billingsley, co-owner of Floors and More, Benton, Ark., the state increase of $1 to $11 per hour does not change his current compensation—yet. “What it does is brings our entry-level positions closer to the minimum wage, making more laborious positions harder to fill. We continue to look for ways to not only be a competitive wage provider but to offer other opportunities for the workforce to be happy with their career choice.”

In Boulder, Colo., Paul Schallberg, co-owner of Star Flooring, said his current compensation structures for salespeople (some are commission-only while others are salary plus commission) and installers are above the minimum wage in Colorado (up $0.32 to $12.32 an hour). “However, I can foresee issues in the future making it more difficult to procure entry-level personnel from an already competitive labor market.”

Washington State’s minimum wage hit $13.69 per hour beginning in 2021. When the minimum rises to $15, Don Cantor, owner of Lake Interiors Chelan, said he will have to raise pay for half of his employees by $1 to $2 an hour. At that point, he said, prices will increase. “We will have to raise our prices to the end user to keep our bottom line from eroding and to maintain our margins.”

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Jan. 25/Feb. 1, 2021

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