Local business owners taking minimum wage hike in stride

Marie Havenga • Mar 29, 2019 at 10:00 AM

Michigan’s minimum wage rises by 20 cents today, to $9.45 an hour, but local business owners don’t seem to be too concerned about how it will affect their enterprises.

Alex Rogalla, owner of the Spring Lake and Fruitport Orchard Market stores, said it’s part of the cost of doing business.

The change will affect mainly the entry-level high school kids who work for him, Rogalla said. Other employees make more than minimum wage.

Although he doesn't expect the new minimum hourly wage to necessitate a hike in grocery costs, Rogalla said the permanency of the hike will eventually take its toll.

“It's a concern because it's an ongoing increase — it's not just this year,” he said. “It will definitely increase our labor costs. It's not a huge hit, but when you times it by 52 weeks, it adds up. It adds to the cost of doing business.”

Rogalla doesn't expect any changes in business operations because of the wage increase.

“We'll do what we have to do and follow all the right steps,” he said. “We have no plans to do anything rash — no cuts or anything like that.”

Rogalla said he has no estimates on how much more it may cost the Orchard Market stores. He said there are other ways to combat expenses.

“There are other expenses within the budget you can perhaps pare back on, like insurance coverage or advertising,” he explained. “You can try to find better prices out there.”

Today’s pay raise is the first of 12 annual increases, until the minimum wage hits $12.05 per hour in 2030.

As the years roll on, the higher minimum wage will become a bigger issue, according to Rogalla.

“As you get years down the road, and it becomes $10, $11 or $12 an hour, something is going to have to give,” the grocery store owner said.

Kelly Larson, owner of Sweet Temptations and several other local businesses, said she's been planning for the minimum wage increase and has steadily raised prices to accommodate it.

“Luckily, we have known ahead of time and have known for five years,” she said. “We try to do an every-other-year price increase so we're not doing a price increase this year. Last year, we anticipated it and we were ready for it. We had a (5 percent) price increase last year.”

Besides minimum wage changes, Larson said her businesses are particularly susceptible to weather changes. If it's warm and sunny, people think about ice cream. When it's cold, not so much.

Larson said she has no idea how much the 20-cent-per-hour increase will cost her.

“It's just one of the hits of doing business,” she said. “I never get a price decrease on vanilla, or help on rent, or those kinds of things. It's not the way it works.

“When I first started, I think an ice cream cone was $2,” she continued. “I started at minimum wage (in 1985) and it was like $1.75 an hour. I remember being really excited when it was $3.35 an hour.”

Katie Sandberg, owner of the Paisley Pig restaurant in Grand Haven, said the minimum wage increase won't have much of an effect on her business because most of her employees are tipped workers.

“We won't see much of an effect, not like some of the other shops around here,” she said. “Most of the (non-tipped) staff in restaurants make $10 or $11 an hour starting out.”

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