Workers and employers agree that $7.25 an hour is tough to live on

Last updated: August 24. 2013 11:39PM - 3845 Views
By - smocarsky@timesleader.com

Loco Yoco West Pittston store manager Bill Kane, left, waits on customers Jeanie and Kevin Pugliese of Exeter on Wednesday. Store owner Nanda Palissery starts employees at $8 an hour because he thinks minimum wage is too low.
Loco Yoco West Pittston store manager Bill Kane, left, waits on customers Jeanie and Kevin Pugliese of Exeter on Wednesday. Store owner Nanda Palissery starts employees at $8 an hour because he thinks minimum wage is too low.
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Area employers think it unlikely that a nationwide strike being organized among minimum-wage workers this week will gain traction locally, but people interviewed in the Wyoming Valley agree that an hourly wage of $7.25 in Pennsylvania is hard to live on.

“It’s pretty tough getting by,” said Mike Quagliariello, a general laborer in construction-type jobs.

On Thursday the Services Employees International Union and community groups in many cities are calling for low-income workers to strike as part of a series of one-day, rolling walkouts that have occurred in major cities in recent weeks, according to The Los Angeles Times. There have been no public disclosures that workers in this region will participate.

But Quagliariello, 26, of Plymouth, said he “probably wouldn’t need more than one job” if Pennsylvania’s minimum wage was increased to $9 an hour, as proposed by some House and Senate bills introduced earlier this year and languishing in committee.

“It’s been $7.25 a few years now. Everything’s harder,” he said, adding that working for the current minimum wage is “almost like slave labor.”

The last voluntary increase of the minimum wage in Pennsylvania came in 2007, when the rate was increased to $7.15 per hour. Two years later, the rate increased to $7.25 to be in compliance with the federal minimum wage that went into effect.

Individual states are free to set a higher rate. The highest rate is found in Washington state, at $9.19 per hour. But officials in the state’s largest city, Seattle, are considering an increase to $15 per hour in that city.

Annual adjustments

Quagliariello thinks the minimum wage should be tied to the inflation rate or Consumer Price Index, which is what some Pennsylvania bills propose to do.

State Sen. Christine Tartaglione introduced a bill that would require the minimum wage to be increased by a percentage tied to the Consumer Price Index beginning this year. Another bill she proposed would do the same, but beginning in 2016. That bill also would increase the minimum wage to $9 an hour over a three-year period preceding the beginning of the cost-of-living adjustment.

Shaun Butler, a 30-year-old from Wilkes-Barre who peddles coffee and pastries at Dunkin Donuts on Public Square in Wilkes-Barre, said passage of such a bill would have “a dramatic impact” on his life.

“Try showing me somewhere you can make $7.25 an hour and pay your bills and rent,” said Butler. “It’s a constant struggle.”

Butler and Quagliariello disagree with opponents of raising minimum wage who say it will force some small businesses to close.

“There’s government kickbacks (and tax credits) for stuff like that,” Butler said. “A lot of small businesses pay more than minimum wage. I have a friend who works for a small business and started at $8 an hour plus tips. And they’re local owners, not a national chain.”

Pride in work

Kingston attorney Nanda Palissery, who owns Loco Yoco soft-serve frozen yogurt shops in West Pittston and Dallas, said he also believes the state minimum wage is too low. That’s why he starts his employees at about $8 an hour.

And paying a wage above minimum can benefit the employer as well as the employee, he said.

“People take more pride in their work if they’re making more than the minimum wage. … I just think there’s a stigma attached to it. An employee could think, ‘I can get a minimum wage job anywhere,” he said.

And while he concedes that living on $7.25 an hour is difficult, increasing the minimum wage to $9 an hour in one fell swoop would be tough on his business.

“That would be a 12½-percent increase. Right now, my payroll is $3,000 to $3,200 a week between both stores,” said Palissery. “Twelve percent would be another $300 to $400 more per week. That would be a lot for a small business.”

Raising the minimum wage slowly would be more palpable, he said.

Raising retail prices

Joe Fasula, co-owner of nine Gerrity’s supermarkets in Luzerne and Lackawanna counties, agreed. Still, across-the-board wage increases for his employees would mean a jump in food prices for the consumer.

“I always like to see people make more money,” Fasula said, noting that he starts employees with experience at wages above the minimum.

An increase in the minimum wage “certainly would be a big help to them,” but it would also “hinder a business’ ability to be flexible. And it would certainly hit the price of food. The last time it went up, there was a large increase in the price of food,” Fasula said.

Fasula believes that increasing the minimum wage will “mostly benefit the 16-year-old kid” who has no experience in the job market and can’t ask to start at a higher wage because he or she has no skill set. He said it would hurt the senior citizen who would see no increase in income but would see food prices climb.

Mixed bag

Anthony Liuzzo, a Wilkes University business and economics professor and director of the school’s Arizona Business Programs, said raising the minimum wage obviously presents both positives and negatives.

Minimum wage “usually doesn’t feed a family or provide some reasonable level of comfort” for the earner, so an increase would be “helping out persons at the bottom of the economic ladder.”

“On the other hand, these kinds of increases can be inflationary and hurt the larger economy,” Liuzzo said, adding that employers will either take a hit to their profits, increase prices or eliminate some jobs.

“Some (minimum wage earners) will be better off and some (whose jobs are eliminated) will be worse off,” Liuzzo said. “It’s something to really think about.”

Liuzzo doubted a strike would have much, if any, effect on employers. Some employers might even penalize the strikers because it wouldn’t be a legal strike, Liuzzo said.

“You want government to do something, and you’re striking against the employer. If employees want to do something, they should do something to show their disappointment with the government,” he said.

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