Small business owners are a resilient bunch. We know there will be hard times in the life of our business, especially starting out. These are things to be endured in the belief we will emerge stronger for the experience.
But we also recognize that resilience isn’t without limits. Always lurking is the possibility of a tipping point, a circumstance so dire that it could bring an end to our dream of business ownership.
What most of us may have never imagined is that the tipping point might come at the hands of our own state government.
That’s the scenario taking shape now as the Hawaii Legislature considers raising Hawaii’s minimum wage to as much as $17 an hour.
Proponents of raising the minimum wage argue that everyone has a right to a living wage. As the owner of a small restaurant and bar with hourly tipped and non-tipped employees, I agree they all should receive a livable wage. However, during a pandemic and recession, now is not the right time to arbitrarily raise wages for that purpose.
My businesses are currently operating at 40% of our normal revenue. While able to break even for cost of goods, labor, utilities and health insurance, we are unable to pay one of our biggest bills — rent. And we are slipping deeper and deeper into the hole every month. Adding higher wages to our labor costs will not only finish us off, but also make 16 people unemployed with very little job prospects in an industry decimated by COVID.
The Legislature couldn’t have picked a worse time to consider raising the minimum wage. Unemployment in Hawaii remains high, many jobs have disappeared, and businesses in our highest-risk industries — restaurants, hospitality, and tourism — have already experienced significant failures. Many of the businesses that remain are struggling to stay afloat. Our own state economists say it could be years before things turn around.
If the minimum wage is raised to $17 or even $15, many businesses will be forced to lay off workers, reduce their hours, or charge significantly higher prices. This formula may help some, but others won’t be so lucky. They will have no choice but to close, eliminating jobs entirely, which is probably the sad truth awaiting many businesses and employees.
What is particularly maddening is to know how hard businesses have fought to stay alive during the past year, dutifully following the city and state COVID-related mandates that have made their operations so tenuous. Many have had to borrow or seek government assistance to pay their employees. In some cases, business owners are foregoing their salaries and using the money for payroll and employee benefits.
Instead of adding to the problem, legislators should go all in on helping us get us out of this COVID mess by supporting small businesses. If we are helped to grow and become profitable, we’ll all emerge from this economic morass more quickly and jobs and higher salaries will become the twin measures of our success.
Christian Self is the owner of taco shop Taco’ako and bar/restaurant Bevy, both in Kakaako.