Minimum-Wage Hike Comes With Trade-Offs Some Employers Plan Job Cuts; Others Say They’Ll Raise Prices

When the new year arrives Friday, thousands of low-income workers will have extra reason to celebrate as Washington state’s minimum wage goes up 80 cents an hour.

But the new minimum wage also could mean higher prices for fast food, less attentive restaurant service and taller grass in city parks.

The first of two hikes approved by voters last month in a statewide ballot initiative, the wage will rise to $5.70 per hour Friday, then to $6.50 in 2000. After that, it will be adjusted according to increases in the cost of living.

Washington’s current minimum wage is $4.90 an hour, although most employers are required to pay the federal rate of $5.15.

For Spokane’s Parks and Recreation Department, the wage increases for nearly 1,000 seasonal employees amounts to an extra $164,000 out of the department’s $12 million annual budget, said Director Ange Taylor.

In 2000, that number will increase to $227,000.

As a result, the department will trim approximately 40 part-time jobs, or the equivalent of 12 full-time jobs, this summer and the equivalent of another 15 full-time jobs next summer, said Taylor.

“We’re still going to offer safe parks and we’re still going to provide services,” Taylor said. “But we may not be able to get the parks open as early and ready for the public as we’d like. Maybe we won’t be able to get the grass mowed as often.”

The wage increase also could have a significant impact on Washington restaurants.

Currently, tipped employees are exempt from the federal minimum wage and can be paid $4.90, the state wage. After Dec. 31, however, all waiters and waitresses must be paid at the new state minimum.

At Tony Roma’s on North Division, the wage hike will immediately add $800 a week to the restaurant’s payroll and could eventually be as much as a $1,000 increase as other employees receive raises, said owner Dan Robbins.

To cut costs, Robbins will eliminate a greeter and busboy from each shift, and ask the rest of the staff to pick up the slack.

“That’s a huge increase (in wages), so they’re going to be carrying more weight” Robbins said.

Robbins said he ruled out any large increases in prices, deciding that his customers wouldn’t stand for it, but he said prices will eventually have to go up.

Fast-food restaurants, which often start employees at minimum wage, generally keep staff levels as low as possible and don’t have many options for recouping revenue lost on a wage increase.

Many local McDonald’s will eventually raise prices 2 or 3 percent, said Cory Ray, director of operations for the 26 McDonald’s franchises owned by Spokane Food Services.

“The only person who is going to notice it is the person getting the same thing every day and all of a sudden it goes up a nickel,” Ray said.

While the minimum-wage increase may force employers to scramble, it’s good news for many workers who will be getting a raise.

“It will help me out a lot,” said Steven Tesfai, who works close to full time at the Red Hot Grill Mexican restaurant in the Crescent Food Court downtown.

Even employees who earn more than the minimum wage may be seeing their salaries go up as employers try to keep salary structures intact.

For Charity Loftice, manager of Sparky’s Firehouse Subs at the Crescent Court, that means a $2.10-an-hour raise.

‘It works for me,” Loftice said with a grin. “I’m a working mom. I’ve got a child to support.”