Starting salaries at Noonan True Value Hardware already outpace Illinois’ minimum wage of $8.25 an hour, but that doesn’t mean calls on both the national and state levels this month to raise that benchmark wouldn’t affect the family-owned business.
“I’ve been through this cycle a couple times,” said company president Matt Noonan III, who has been involved with the family hardware operation in Springfield for four decades. “When minimum wage goes up, wages for everyone go up, which means we have to raise our prices if we want to stay in business.
“I believe the quality of work should drive the cost of labor, not the government.”
Noonan isn’t alone.
More than 88 percent of Illinois members of the National Federation of Independent Business voted to oppose any legislation that would increase the state’s minimum wage. The organization polls its 11,000 Illinois members annually to decide what public policy to pursue.
The data was released last week as a pre-emptive strike to Gov. Pat Quinn’s call to raise Illinois’ minimum wage rate to $10 an hour, highest in the nation.
At $8.25, Illinois already bests the federal rate of $7.25 an hour and ranks the state among the top five minimum wage rates in the country, trailing Washington, Oregon and Vermont and tying with Connecticut.
Let market dictate
In his State of the Union address, President Obama echoed Quinn’s call to raise entry-level salaries, calling for the federal benchmark to be raised to $9 an hour.
“The emails we’re seeing are incredulous that in this economy, the state would consider adding more burden to businesses,” said Todd Maisch, executive vice president of the Illinois Chamber of Commerce. “Business owners are asking ‘What else can you throw at us?’”
Jean Campbell, business manager for Alice Campbell Staffing, said most of its temporary workers earn $8.50 to $9 an hour.
“The problem with increasing minimum wage is it can actually press employers to hire fewer people because it pushes their costs up,” Campbell said. “If you let the market dictate salaries, employers who want qualified employees, they know what they have to pay to get that person.”
Area businessman Gene Rupnik has no doubt that when the minimum wage goes up, job opportunities go down.
“It always sounds good,” said Rupnik, owner of the Microtel Inn & Suites and the Springfield IHOP franchise, “but I do know that when minimum wages goes up, you lose jobs. High school, college kids looking for summer jobs are affected the most.
“I like to hire kids to plant flowers. But when the labor costs go up, I have to think, ‘Do I really need those flowers?’”
Rupnik said he offers minimum wage to unskilled, entry-level candidates like the IHOP greeters. Their wages increase as their skills expand, he said.
“(Increasing the minimum wage) raises the cost of doing business,” he said. “Businesses can’t keep absorbing the increased demands by the government. You have to increase your prices.”
Right thing to do?
Peter Lazare, owner of the local drive-through coffee business Grab-A-Java, said that while pass-along costs may be the case for most employers, that doesn’t mean raising the minimum wage is the wrong move.
Grab-A-Java employees already earn closer to Obama’s desired $9-an-hour rate. The also receive benefits like health-care coverage, paid sick leave and vacation days.
“We understand how costly it is to live, raise a family on minimum wage. If raising minimum wage would help workers on the bottom, that’d be great,” Lazare said.
“If we went to $10 an hour (minimum wage) we’d make adjustments and we’d see how that affects our bottom line. Would we raise prices? I don’t know.”
Natalie Morris can be reached through the metro desk at 788-1517.
Minimum wage comparison
New Hampshire, $7.25
New Jersey $7.25
New Mexico $7.50
New York $7.25
North Carolina $7.25
North Dakota $7.25
Rhode Island $7.75
South Carolina n.a.
South Dakota $7.25
West Virginia $7.25