After last month’s voluntary minimum wage increase at Buz and Ned’s Real Barbecue, U.S. Labor Secretary Thomas E. Perez stopped by the restaurant on the Boulevard for a chicken sandwich Monday — and to find out first hand about the new policy’s impact.
“Business owners understand that when you treat your workers well, you get a loyal work force. When you can make a decent wage and raise a family, that’s what it’s all about,” Perez said in an interview. “Americans need a raise, and Buz has provided a raise voluntarily.”
In August, Buz Grossberg, owner of Buz and Ned’s, bumped the start pay for employees at his two Richmond-area restaurants from $8 to $12.50 per hour for regular hourly workers and from $6 to $8 for servers who also make tips.
Buz and Ned’s increasing starting wage to $12.50/hr
“People are talking about Richmond becoming a good city for food, but let’s also make it a good city for people to live,” Grossberg said.
“We saw a trend that has been happening for a long time that wages have not been keeping up with the living expenses of people. Too many people were taking part-time jobs or having two or three jobs,” Grossberg said Monday. “We wanted full-time people, we wanted people who are committed to our business.”
The restaurants’ new pay rate for regular workers is 50 cents above the $12 federal minimum wage proposed by Rep. Robert C. “Bobby” Scott, D-3rd. Scott’s measure would gradually phase in the pay increase to be implemented by 2020. It would also index the federal minimum wage to the median wage, which means it would automatically adjust to keep pace with the cost of living, and gradually eliminate the sub-minimum tipped wage.
“That’s enough for a family of three for the breadwinner to be making above the poverty line. We shouldn’t have people working full time still living in poverty,” said Scott, who had invited Perez to come to Richmond for a roundtable discussion on income inequality at Virginia Union University on Monday afternoon.
The Obama administration has backed an increase of the federal rate, currently $7.25 an hour, to $12. That was up from the beginning of the year, when the administration backed an increase to $10.10 an hour.
“We don’t pick numbers out of thin air,” Perez said, when asked about the $1.90 increase from the previous proposed rate. “The minimum wage laws stand for the proposition that nobody who works a full-time job should have to live in poverty. If you’re making $12 an hour, you can get just above the poverty line. They are not getting rich.”
Too many Americans work in a full-time job, yet they are forced to go to a food pantry to feed their families, Perez said.
“That’s not who we are,” he said. “When you treat people fairly and pay a decent wage, it’s good for workers, it’s good for business, it’s good for the economy.”
Scott’s colleague Rep. Dave Brat, R-7th, said a minimum wage increase would dampen job growth because it would increase the cost of labor.
“If you raise the price of any good, do you buy more or less? The same logic clearly applies to the wage rate and the price of labor,” Brat said in an email. “Right now the unemployment rate for kids coming out of college is terrible. We want to hire more of these kids, not less, and this policy will not help.”
Scott said that a federal pay increase — if done right — would trigger economic growth.
“If there is more people making the minimum wage, more people will be able to buy the products,” Scott said. “All the studies have shown that if it is gradually phased in, it does not have an adverse effect on the economy or on jobs.”
Grossberg said the voluntary wage increase at his restaurants has already paid off.
“It has helped morale, people are willing to do more for the company because they have a better attitude about what the company is doing for them,” Grossberg said.
“As far as a bottom line effect on my company, we haven’t raised prices. But we are willing to stick that out in exchange for higher productivity and less drama and operating issues than we had before. I think the trade-off is well worth it.”