Minimum wage increase helps individuals, ok for small biz

Peggy's Restaurant near Merrill Field in Anchorage. Hillman/KSKA
Peggy’s Restaurant near Merrill Field in Anchorage. Hillman/KSKA

Alaska’s statewide minimum wage increase went into effect on Tuesday. Now, thousands of jobs in the state pay $8.75 an hour — a dollar increase. So what does this means for Anchorage’s small businesses and consumers?

26 min wage – better

It’s the slow part of the afternoon at Peggy’s Restaurant. Customers wander in, a couple of regulars hang out at the counter. Waitress Susie Sander tallies up bills.

“Everybody loves it,” she says about the minimum wage increase. “$8.75 – honey – $8.75 an hour…”

Sander has been working at Peggy’s for 10 years. “All the money I make goes to kids and, I mean husband, but the extra dollar, honey, I can use for myself.”

Susie Sander at the register at Peggy's Restaurant in Anchorage. Hillman/KSKA
Susie Sander at the register at Peggy’s Restaurant in Anchorage. Hillman/KSKA

William White is washing dishes in the back.

“Well, I haven’t seen it on my check yet, but hopefully on my next check it will help out a lot.”

He plans to use it for paying the rent.

Alaskans overwhelmingly voted for the increase last November. Minimum wage went up by a dollar this year and will again in January. Then, increases will match inflation. According to the state’s Department of Labor and Workforce Development, about 16,000 jobs are affected by the increase.

Dan Robinson, chief of research and analysis at the department, says the impact on the overall economy will be negligible.

“In the macroeconomic data that we look at, it will almost certainly not be identifiable as having caused a bump here or a change in trend there.”

But Robinson says it will matter to individuals. He says that 64 percent of the people who are working at jobs that likely pay minimum wage are over 25. One quarter are over 45. Most of them — 57 percent — are female.

Peggy’s Restaurant regular Curt Woodard says the increase is long overdue and the stair-step implementation makes it workable.

“The best thing they can do is just what they’re doing. Give’em a dollar this year, a dollar next year. And then it averages out and everyone can take it a little bit at a time.”

Manager Daniel Smith agrees; most businesses can handle the small increases over time. He says that’s not the issue.

“Nobody that owns a business minds it, it’s to get the rest of your customers to understand why you’re raising your prices. That you have to raise your prices because these guys cannot live on $7.75 an hour.”

Smith says they’ll only raise their prices in small increments — 15 cents on one item, 25 cents on another. He says they’ll cut some hours, too, but that’s mostly because business is slower in the winter. In the long run, they may give all of their employees a raise, even the ones not making minimum wage, just to be fair.

But for many small businesses in Anchorage, the minimum wage increase won’t make a difference. I spoke with more than a dozen business owners who say they either pay over the minimum wage already or are so small they don’t have employees anyhow.