Storeowners speak out about minimum wage
by Aubre Andrus
News Reporter
Downtown restaurant and business owners are expressing mixed feelings about an upcoming increase in minimum wages.
Beginning March 30th, the minimum wage in Madison will increase from $5.15 an hour to $7.75 an hour. The minimum wages of tipped employees are also increasing from $2.33 an hour to $3.88 an hour.
The present wages will increase gradually depending on the size of the business, and the new wages will be in full effect by January 2008.
Some small retail storeowners on State Street, such as Jon Williamson, owner of Sports World, are not worried about the increase.
“I have not paid anyone less than $7.50 for four years,” he said. “You get what you pay for.”
Mark Paradise, owner of Sunroom Café, feels the same way.
“I don’t think it’s going to affect us,” he said. “Almost all of our employees make that or more.”
John Hutchinson, owner of Fontana Sports Specialties, said although the retail stores may not be affected, other storeowners would feel some effects.
“I know for some people I’ve talked to, especially the restaurants, they say it’s going to affect them dramatically,” he said.
Tom Woodford, general manager for Angelic Brewing Co, explained smaller restaurants cannot afford a wage increase because they lack the flexibility large chain restaurants have.
“Rent has gone up over the past decade substantially in the downtown area, and that in itself is driving away the smaller businesses,” he said. “People can’t afford to own businesses on State Street, and I’m sure the wage increase won’t help.”
Woodford is concerned about the future of the smaller, more unique establishments in downtown Madison.
“The classier places in downtown Madison will soon disappear and downtown Madison will turn into one large corporate chain,” he said.
Both Woodford and Dustin DiMarco, manager of State Street Brats, believe the restaurants in Madison will have to increase their prices because of the heightened wages.
“I think it’s a big mistake on the part of the city, quite honestly,” DiMarco said. “Jobs that don’t need to be in Madison are going to take their business elsewhere, but for restaurants that have to be located in Madison, the prices are going to go up more.”
Woodford feels inflation will be the ultimate outcome of the increases, saying, “We’re going to have to hit the customers for more money for a higher payroll.”
A manager of Rainbow Bookstore Coop, Marsha Rummel, believes the minimum wage increase is a good idea. She noted the cost of downtown living has increased, which low-income workers have trouble affording.
DiMarco, however, does not agree with these thoughts. Even with the minimum wage increase, he said low-income workers will still remain below the poverty line and upper-class business owners will not take a pay cut in order to compensate employees for the higher wages.
“The people that are going to miss out are the middle class, because their buying power is going to go down,” he said.
DiMarco said after the restaurants increase their prices, tourism would also be affected.
“If you can get a burger and a beer for $5 in Middleton and the same product for $8 in Madison, what would you do?” he asked.
Woodford admitted the outcome of the minimum wage proposal was better than he anticipated. According to Woodford, it landed right in the middle of Ald. Austin King’s, District 8, and Mayor Dave Cieslewicz’s proposals.
“I think our concerns were addressed, but we really won’t know what will happen until 2008,” Woodford said.