A Store-by-Store Approach to Minimum Wage

SEATTLE — To raise your minimum wage or not to raise your minimum wage, that is the question.

The minimum wage is not only a longstanding national political debate in the United States, but also a hot-button issue at the local level that’s gaining momentum.

In 2012, the minimum wage movement known as the “Fight for $15” heated up when fast-food workers went on strike in New York City. Since then, other cities like Seattle, Los Angeles and San Francisco have agreed to increase their minimum wages to $15 this year; Portland, Ore., agreed to $14.75.

New York and California will have the highest state minimum wages when they reach $15 per hour over the next few years. A measure was signed in California that will take the state’s minimum wage from its current $10 to $15 by 2022. In New York, legislators have agreed to gradually increase the minimum wage from $9 to $15 by the end of 2021 in New York City; it will increase to $12.50 by 2020 in upstate New York, with further increases to $15 based on inflation and other economic indicators.

Across the nation, some c-store retailers are proactively boosting their pay scale and using it as an opportunity to stand out as an employer, despite the cost and competitive challenges.  

Other c-store operators are tweaking their wages on a store-by-store basis, rather than chainwide. Case in point: Convenience Management Services Inc. (CMSI), based in Temple, Texas, has made some store-by-store competitive wage decisions.

According to Terresa Burdick, director of operations, the company has a very unique business model in that “anywhere in the country, we will step in and manage a site with very short notice, so we have to monitor state as well as city minimum wage laws to be competitive and compliant.”

CMSI has one store location inside Seattle city limits and several sites in the Seattle area, two of them very close to the city’s boundaries. Based on the number of employees CMSI has, the minimum wage for its Seattle store is $13 per hour plus mandatory paid sick leave. The rest of Washington State carries a $9.47 minimum wage and does not require employers to pay sick leave benefits.

In order to be competitive at the two sites nearest Seattle, CMSI has raised its starting wage here to $10.50; more depending on experience,” Burdick explained.

“Even at that wage, submitted applications are low, so we stress to the applicant that we have paid vacation time, company-provided term life insurance, and regularly scheduled performance reviews that can result in a pay raise,” she added. As Seattle’s minimum wage continues to increase on its yearly timetable, CMSI intends to follow suit at its peripheral sites.

“Conversely, we have a site in Oakland, Calif., where the city minimum wage is $12.55 per hour vs. the California state minimum wage of $10. Our site is right on the city boundary, so we are flooded with applications,” Burdick told Convenience Store News.

The bottom line for convenience stores is that they must deliver on convenience, in spite of wage challenges, according to Don Stuart, managing director at Cadent Consulting Group in Wilton, Conn.

“C-stores are built on convenience, and if you don’t do a good job attracting a certain degree of talent, you will not deliver on convenience and the proposition is undermined completely,” he reasoned. “So, you have to face that important reality in the short term: C-stores must deliver convenience and without sufficient and good staff, you can’t do it.”

Stuart encourages retailers to “test the middle ground,” much the way CMSI is doing. That is, for those who are near high minimum wage areas, they should consider raising their wages a bit, while also exploring what other benefits can be offered.

It’s time to “become creative,” as Stuart puts it, in regards to exploring more tangible benefits such as time off, health benefits, vacation benefits, and even the possibility of hiring some individuals as independent contractors with more flexibility.

For more on the minimum wage movement and its impact on convenience store operators, look in the October issue of Convenience Store News.