Film-Tech Forum ARCHIVE: Iowa minimum wage increase

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Posted by Chad Souder (Member # 343) on 02-01-2007, 01:56 PM:

Iowa's new governor, Chet Culver, made his first signing an increase in the state's minimum wage. It will go to $6.20 on 4/1/2007 and up to $7.25 1/1/2008. Politics aside, this will greatly affect Iowa theatres. I intend on making it no secret to the customer the reason for our inevitable price increases at both the box office and concession stand. This 40% increase in annual payroll will be a major expense to absorb.

Forgetting about the possible federal increase, which of your other states are experiencing or have recently experienced increases and how will you/did you handle it with staff that is/was making more that minimum wage at the time of the increase?

Posted by Ian Price (Member # 14) on 02-01-2007, 02:31 PM:

I have now worked in two states that have increased the minimum wage. In California I owned a theatre and in Colorado I manage a theatre. The upshot is that increasing the minimum wage hardly ever puts a business in peril. If it does then your business wasn't going very well anyway. Most theatre employees are part time and the total hit on the payroll isn't that bad. Also most states that have increased the minimum wage have experienced positive economic growth.

We have had much bigger hits when energy prices spike or when the candy supplier raises the case price of candy. How about when your insurance company doubles the premium. At least you are getting value for your money when you pay your employees. In every case where the minimum wage goes up, we weren't paying the minimum anyway.

Posted by Jack Ondracek (Member # 1466) on 02-01-2007, 03:14 PM:

We've also paid somewhat above the minimum. Still, it hit $7.93 this year, making our state (I believe) the highest in the country.

I don't make any announcements about it, since it affects everyone in the state. It is what it is, and businesses have to set their prices accordingly.

(edit) We START at above minimum. Everyone gets raises for each year they return.

[ 02-01-2007, 07:25 PM: Message edited by: Jack Ondracek ]

Posted by Brad Miller (Member # 2) on 02-01-2007, 03:15 PM:

It's not going to make that much of a difference. You could bump up ticket and concession prices 25 cents and still end up making more money if you do the math. It only takes a couple dozen employees to run a theater with hundreds of paying customers in it.

Posted by Mike Blakesley (Member # 26) on 02-01-2007, 06:19 PM:

Montana's minimum wage went up a dollar an hour to $6.15 on Jan. 1. (Yes, it's lower than other states but the cost of living here is lower.)

All of our employees make more than the minimum, but we gave everyone a dollar an hour raise anyway. We raised our ticket prices a quarter, and "adjusted" the concession prices, but have had no complaints. If the Federal minimum goes to $7.25 we'll probably have to go up another 25 or 50 cents...that might not go down so easily!

Posted by Louis Bornwasser (Member # 3063) on 02-01-2007, 06:46 PM:

Would you rather have 10 kids at min. wage or 4 real people for (a lot) more per hour?? Your quality of life and that of your customers is worth something.

Usually 2 good hard-working adults can out work 4-6 kids. Louis

Posted by Matt Fields (Member # 3211) on 02-01-2007, 09:47 PM:

Ohio just went up to $6.85 from $5.15. I was paying some minumum, some over, depending on experience. Now everyone is making minumum except for one. We have 5 employees plus wife and I.

Wife and I work vast majority of hours, so this didn't effect us too much. I have however raised some concession prices to offsett invetiable food cost increases and minumum wage increase.

Posted by Christopher Crouch (Member # 3784) on 02-02-2007, 02:57 AM:

California went from $6.75 to $7.50 this year and will go to $8.00 next year. As others have mentioned with their theatres, our prices adjusted accordingly (although, our price increase was company wide, so it wasn't entirely related to minimum wage).

As for those who were making over minimum wage, some were adjusted, but most found themselves making closer to minimum. Basically, we tried to avoid individuals being "dropped" to minimum wage, but we didn't bump up those who would still be making more than minimum.

We didn't have any real complaints from customers or staff; most people were quite understanding of the situation.

Posted by Jeff Lacey (Member # 3217) on 02-02-2007, 03:50 AM:

I agree with Brad. It's just not going to make much of a difference. Certainly not a 40% increase in your payroll. The math has to be wrong on that!

Michigan min wage went up from $5.15 to $6.95 in October.... Sadly, those under 18 got screwed and their min went up, but only 85% of the $6.95.

Our 18 and older crew were already making $7/hr, and all of our minors were making $6. Since they got screwed by not getting the new min, we increased them all to the new 18+ min anyway, to $6.95. Our payroll went up only 6%, and I belive they are worth it.

Now the new people we hire in get paid $6.50/hr, with 6 month reviews, but that will be adjusted in July when the new min goes up again. And again next year. We were able to eat the higher wage rates no problem without raising any prices whatsoever.

Like another poster said, if paying your staff a higher wage breaks you, you just aren't doing all that good to begin with. Given the cost of things today, $5.15/hr is just an unreasonable and unliveable wage for anyone, be 16 or 60.

Posted by Jack Ondracek (Member # 1466) on 02-02-2007, 07:31 AM:

quote: Jeff Lacey
Given the cost of things today, $5.15/hr is just an unreasonable and unliveable wage for anyone, be 16 or 60.

True, but this is an old argument that's been made by the fast-food industries for years. Someone, still living at home and just entering the job market shouldn't need a "living wage"... especially if he's just learning (at his employer's expense) how to drop a basket of fries or serve a Coke.

That other businesses get away with paying low wages is just a reflection of the fact that people WILL work for them. If the economy isn't overloaded with people looking for a job, you might be forced to pay better wages in order to find the kind of people you want. And... as Louis says, you can always choose to pay better wages for a higher calibre employee.

Shouldn't that be the way it's done, rather than government forcing specific rates?

Posted by Bobby Henderson (Member # 840) on 02-02-2007, 10:05 AM:

What I cannot forgive is some cheap-ass convenience store chain paying cashiers minimum wage or a few pennies above it to risk their lives working the graveyard shift. I see lots of American citizens working those kinds of jobs and lots of other shitty jobs famous people stupidly think only illegal aliens would want to do.

While the minimum wage is intended only as a starting point for teenage burger flippers there's a lot of people stuck working 2 or even 3 of those jobs through various circumstances. Real life is complicated. I see a lot of elderly people doing minimum wage work because many businesses who pay better just won't hire them since they're elderly.

I have little problem with a movie theater paying high school age kids minimum wage. There's nothing wrong with a good restaurant paying servers next to nothing since the servers usually do pretty well on the tips.

But there's lots of other businesses out there which abuse the minimum wage situation, and those outfits seem to be the first to gripe about a wage increase (unless they're already paying a bunch of illegals under the table to dodge workers comp insurance bills).

As others have suggested, in the end you get what you pay for out of your workforce. Pay them minimum wage with no benefits and just few enough hours to keep them part time, you can't expect a whole lot in return.

There's quite a few businesses in my town that shit on their employees, and yet these guys seem to be the first to bitch about their kids leaving town when they grow up and customers driving up to Oklahoma City or down to Wichita Falls to do business with their rivals. Maybe if they invested better in their most important asset for doing business (their workforce) their customer service and product might be good enough to keep people from driving elsewhere. Maybe if they invested better in their community all their town's young people wouldn't be looking to move to bigger cities for better paychecks.
[Roll Eyes]

Posted by Jeff Lacey (Member # 3217) on 02-02-2007, 11:04 AM:

quote: Jack Ondracek
Shouldn't that be the way it's done, rather than government forcing specific rates?

To a degree, the wage should be a reflection of market conditions, however, every year the wage gap between the highest paid CEO and the lowest paid staff gets larger and larger. Basically many, many business take advantage of their workers.

The only reason people work for the lower wages, is because they cannot find higher paying jobs or lack the skills to obtain higher paying jobs. Making $5.15/hour is not going to pay for college or even a tech school to get the skills needed either.

This even applies to teen workers, as they will need money to pay for a college education, books, etc. It has been my experience that most of the people I have hired save their money for college expenses, not waste it on CDs, clothes, and other stuff, like most big businesses sugguest when they say minors do not need to make a lot per hour and every time the min wage is proposed.

I guess the crux of what I am saying is that because many, many businesses take advantage of their empolyees, a higher min wage is a good thing. A CEO doesn't need to make millions and millions of dollars per year, while their workers have to work two or three jobs to get by or to better themselves.

Posted by Mike Blakesley (Member # 26) on 02-02-2007, 12:39 PM:

quote: Bobby Henderson
Maybe if they invested better in their most important asset for doing business (their workforce) their customer service and product might be good enough to keep people from driving elsewhere.

Maybe, but if all these stores you mention were to raise their wages to say $10 or $12 an hour, they'd have to raise their prices to cover it, and then even more people would flock to the Wal Mart and you'd lose even more small businesses.

Posted by Matt Fields (Member # 3211) on 02-02-2007, 12:50 PM:

The minumum wage issue is basically a bunch of third party busybodies butting their nose in saying "thats not fair!"

Whatever someone is getting paid is fair to both the employer and the employee, or else they wouldn't do it!

Posted by Mark J. Marshall (Member # 1409) on 02-02-2007, 01:10 PM:

Raising the minimum wage doesn't make the people at the top make less. That might be the intention, but it never happens, so you can forget that.

One of the things raising the minimum wage can do is lower the number of workers (or hours) at the bottom to cover the increased cost. Another thing it can do is make the price of the products go up to cover the cost. If either of those things happen, then it ends up hurting the people at the bottom the most.

So, to cover the cost of the impending government mandated 14% increase in salary for the majority of our employees, our prices are going up (again) accordingly. Which probably will not do much to attract more customers to our business.

Posted by Bobby Henderson (Member # 840) on 02-02-2007, 04:32 PM:

quote: Mike Blakesley
Maybe, but if all these stores you mention were to raise their wages to say $10 or $12 an hour, they'd have to raise their prices to cover it, and then even more people would flock to the Wal Mart and you'd lose even more small businesses.

Did I say "make the minimum wage $10 to $12 an hour?" The minimum wage in Oklahoma is still $5.15 an hour. That's a long way from $10 an hour.

quote:
Whatever someone is getting paid is fair to both the employer and the employee, or else they wouldn't do it!

Not everyone gets to do what they want to do for a living. Some folks just have to take whatever job they can get.

Posted by Mike Heenan (Member # 392) on 02-02-2007, 05:33 PM:

Chad said

quote: Chad Souder
Iowa's new governor, Chet Culver, made his first signing an increase in the state's minimum wage. It will go to $6.20 on 4/1/2007 and up to $7.25 1/1/2008. Politics aside, this will greatly affect Iowa theatres. I intend on making it no secret to the customer the reason for our inevitable price increases at both the box office and concession stand.

Do you keep it secret from your customers that the real cost of a $6 tub of popcorn is probably like 33 cents, and 25 cents on a $5 coke? Not to mention that $4 box of JuJuBees that they can get at Walmart for 89 cents.

Posted by Cameron Glendinning (Member # 3516) on 02-02-2007, 06:58 PM:

If The majority of the workforce gets a wage increase, It gives people more money to spend, perhaps they will be able to afford to go out more often?. The reality is that wage increases keeps the situation pretty much the same, so at least people who go to the movies can afford to keep on going, rather than being forced to find a more affordable alternative ie DVD.

In Australia, we had our first min wage rise in several years. 6.5%. Interest rates, morgages and petrol prices over the last few years make it feel like a game of catch up, in reality our standard of living is still going down, and the rich have never been richer!
Projection work now peaks at $23.50 per hour, in a country where cigarettes cost $11 per pack,$15.50 for a movie ticket in a name chain, petrol up to $1.30 per litre and rents around $350 per week for a modest house in the suburbs.
It is not as good as it sounds.
Youth rates work as a percentage of adult wage which rises from 15 year to till 21, So Mcdonalds wages start around the $6 mark and unemployment averages >5%, Tipping is not part of the Australian culture.
A$1 averages US75c

Posted by Mike Blakesley (Member # 26) on 02-02-2007, 09:35 PM:

quote: Bobby Henderson
Did I say "make the minimum wage $10 to $12 an hour?" The minimum wage in Oklahoma is still $5.15 an hour. That's a long way from $10 an hour.

Well, the Feds are proposing raising it to $7.25 an hour, which will still make all the prices go up and then nobody will be able to live on THAT wage, and everyone is in the same proverbial boat again.

Posted by Monte L Fullmer (Member # 2797) on 02-02-2007, 10:04 PM:

Course, all of these wage increases doesn't do us folks any good that are on a decent salary since we basically have reached the earnings limit and our employers aren't planning on any adjusted living income for us folks - when one thinks about it.

Posted by Bobby Henderson (Member # 840) on 02-02-2007, 11:14 PM:

quote: Mike Blakesley
Well, the Feds are proposing raising it to $7.25 an hour, which will still make all the prices go up and then nobody will be able to live on THAT wage, and everyone is in the same proverbial boat again.

The problem is a lot of those price increases already have been happening with a vengeance for a long time. $5.15 an hour today doesn't buy what $5.15 an hour did over a decade ago (when the minimum wage was propped up to that point). Lots of middle class people who make well above minimum wage have seen the real value of their pay diminish a lot.

The prices for lots of basic items have gone up like crazy. Food, fuel, clothing and utilities prices have all gone way up. And the government conveniently doesn't factor in the price hikes on those items in their tracking of inflation rates because they prefer to spin the number to look more positive. The price of housing has gone way the hell up in many markets. Look at insane run up on the cost of health care and education. It can easily cost thousands of dollars for a low wage person to take some technical courses and train for a better job.

Posted by Lyle Romer (Member # 1266) on 02-03-2007, 09:07 AM:

There should probably be two minimum wages. One minimum wage should be for people that are 18 and under and one for 19 and over. This would allow a slightly higher wage for people who are working for a living but still keep the wages low for the kids (who make up a big chunk of minimum age earners) that are working for money to hang out at the mall.

Posted by Scott Norwood (Member # 30) on 02-03-2007, 09:52 AM:

Why should a 20-year-old be paid more than a 17-year-old for doing the same job?

Posted by Adam Martin (Member # 641) on 02-03-2007, 01:18 PM:

A number of states used to have a "student wage" which was less than minimum wage. Whatever happened to that? (Not that it was fair or anything.)

Posted by Aaron Mehocic (Member # 15) on 02-03-2007, 02:18 PM:

I earned the so-called "student wage" of $3.20 an hour when I first started in this business in 1991. Then I earned $3.65 an hour for a very long time - including three months after turning eighteen when minimum wage was $4.25. I guess I'd have some back pay coming if I really want to push it.

Anyway, Pennsylvania also hiked minimum wage this year. By July 1, it will top out at $7.25 per hour. Our company is scaling back on payroll and scrubbed a major renovation project which included expanding our lobby and adding stadium seating in the three largest auditoriums.

quote: Bobby Henderson
Look at insane run up on the cost of health care and education.

Yeah, the two things in America in which the government is balls deep. I told my wife just this morning that if the community college I teach for raises tuittion like they are currently forcasting, I want at least $150 more per class per semester to teach it. Figure thats what I'll need to cover my costs once the Federal wage kicks in.

Posted by Thomas Dieter (Member # 2507) on 02-05-2007, 01:33 AM:

Gathering from what people have said here, and I'll quote them, I see one possible way to resolve this issue.

quote: Mike Blakesley
Well, the Feds are proposing raising it to $7.25 an hour, which will still make all the prices go up and then nobody will be able to live on THAT wage, and everyone is in the same proverbial boat again.

quote: Ian Price
The upshot is that increasing the minimum wage hardly ever puts a business in peril. If it does then your business wasn't going very well anyway.

quote: Mike Heenan
Do you keep it secret from your customers that the real cost of a $6 tub of popcorn is probably like 33 cents, and 25 cents on a $5 coke? Not to mention that $4 box of JuJuBees that they can get at Walmart for 89 cents.

quote: Louis Bornwasser
Would you rather have 10 kids at min. wage or 4 real people for (a lot) more per hour?? Your quality of life and that of your customers is worth something.

Usually 2 good hard-working adults can out work 4-6 kids.

It seems to me, for a company to profit from a wage increase, federal or state issued, Louis' suggestion would be best. I know that there have been proven many times that the man power we schedule for busy sets to cleanup with ushers and concessionists who are still in high school and first or second job, could have taken just about half of the people if we had higher paid competent employees.

Ian is right as many people have added, the added increase in the payroll just a meer bruise when it comes down to the red and black factor.

If the Feds are to succeed in raising the minimum wage to $7.25/hr that's going to raise the prices of everything causing no relief anywhere. In fact, with the hick in the price being so significant, almost a 50% increase, companies will take that and blow it out of proportion. Next your $3.48 gallon of milk at wal-mart is now increased to almost $6.50 a gallon. For their minimum wage effect to go through and have it be effective, they would need to also instate a freeze on price increase of product until the company can prove that they are taking a hit due to expenditures not related to payroll. With everything coming down to the point where a machine packages and produces a product, and the need for just 1 man that they pay more than $10 an hour to hit start, and check equipment periodically, I don't see how an increase in minimum wage is going to bankrupt a company, Movie Theatre or Whole Sale Wear house.

Mike Heenan is right about the price of theatre food, there is more than a good profit margin on most product in stores to cover the red of a minimum wage increase. You pay a concessionist $7.00 an hour for 40 hours, you come up with $280 in payroll before taxes (This is worse case senerio). Break down by hour how many tubs of popcorn they have sold at for those 40 hours, lets say on average 4.5 an hour. Your have sold $1,128 worth or popcorn at $6 a tub. I think the numbers can speak for themselves, and that's just 1 item of many in any concession stand.

Posted by Matt Fields (Member # 3211) on 02-05-2007, 07:39 AM:

Prices are not that simple.

The price of popcorn and other concessions has to help cover more than just the labor in popping and serving the corn and the raw cost of the seed, oil, ect.

The concessions are part of the overall income that must also help pay for the liability and property insurance; various taxes such unemployment, FICA, workers compensation; lease or mortage on the building; various professionals from accounting to legal to carpet cleaning; maintance/repairs on the building; other labor including janitorial, management, and corporate; the list goes on and on.

Then, assuming a profit, federal, state, and local income taxes must be paid.

And on top of all that, the prices charged must produce enough return on investment to compete with all of the other options that people have for their money.

Investors will not provide capital for movie theatres that give them a 5 percent return if they can invest in restuarants that return 8 percent.

[ 02-05-2007, 12:46 PM: Message edited by: Matt Fields ]

Posted by Jack Ondracek (Member # 1466) on 02-05-2007, 04:01 PM:

Well said, Matt.

One also needs to remember that you're looking at a finite window from which to make your income. Each film presentation will bring in one audience, and the opportunity to sell to that audience is short. Sure, you can multiply that by the number of screens/showings you have for the day, but I'd bet that you don't have nearly the sales exposure hours that a common retail store would.

I stopped worrying about the price of popcorn when I saw what people are willing to pay for a bottle of filtered tap water! [beer]

Posted by Ian Bailey (Member # 1752) on 02-06-2007, 02:06 AM:

Down here the award wage for a projectionist who operates the gear correctly [Roll Eyes]

makesup and breaks down [Roll Eyes]

and possibly remembers to check the oil [Roll Eyes]

is
about $18:50 p/hr and about $21 p/hr if casual.
So I just cannot understand you guys panicking over a $1 p/hr wage rise. If that has a big effect on your business then you'd have to be in big trouble.
Maccas must be really cheap in the states!!
COME ON D-CINEMA !! I just can't wait.
Cheers Ian

Posted by Cameron Glendinning (Member # 3516) on 02-06-2007, 05:10 AM:

quote: Matt Fields
Investors will not provide capital for movie theatres that give them a 5 percent return if they can invest in restuarants that return 8 percent.

Very well put, Lets face the fact that this industry is been taken advantage by the film companies for a long time, now that DVD grosses more, why dont they reduce the ticket share to a more balanced sensible amount. Before cinemas moved into malls, it was the real estate that brought in the long term profit wasn't it?.

Ian, have you factered in the 6.5% federal increase ?

Posted by Chad Souder (Member # 343) on 02-07-2007, 09:03 PM:

quote: Mike Heenan
Do you keep it secret from your customers that the real cost of a $6 tub of popcorn is probably like 33 cents, and 25 cents on a $5 coke? Not to mention that $4 box of JuJuBees that they can get at Walmart for 89 cents.

Although our large popcorn (with free refills) is $4.25 and we don't sell JuJuBees, I think I know what you are getting at. However, you are forgetting the tens of thousands of dollars worth of concession equipment in addition to all the things Matt did such a fine job of pointing out. As I am sure you know, the box office take alone is not enough to sustain a movie theatre.

quote: Jeff Lacey
A CEO doesn't need to make millions and millions of dollars per year, while their workers have to work two or three jobs to get by or to better themselves.

That CEO's decisions can make a different of hundreds of millions of dollars while your concession worker may bring in an extra couple bucks by suggesting a large for only a quarter more. Nobody has the right to tell anyone else when they are earning enough money.

quote: Jack Ondracek
Shouldn't that be the way it's done, rather than government forcing specific rates?

YES!!!