Generous AZ Coffee House Champions Dem Policy with Business-Killing 'Ripple Effect'
While some small business owners have raised objections to a federal minimum wage increase, one coffee shop in downtown Phoenix voluntarily pays its employees $15 an hour.
As AZFamily.com reported, the Xanadu Coffee Company shop charges an extra 50 cents per drink to accommodate the pay increase.
“You have to invest in your employees,” Randy Denton, one of the owners of the coffee shop, said. “You can’t just leave your employees out to dry.”
Denton said that the coffee shop might even raise its employees’ pay to $17 or $18 dollars an hour soon.
According to The Copper Courier, the coffee shop owners worked behind the scenes for 12 years as a wholesale coffee roaster before moving into a retail space last fall. Co-owner Jessica Bueno reportedly told the outlet that paying employees a “living wage” was a “priority” for the business.
“We don’t accept tips, so our prices do reflect that,” Bueno said. “And we have that $15 an hour, but we also have different revenue streams that help us really solidify our business model.”
The co-owner has openly supported the Raise the Wage Act included in President Joe Biden’s $1.9 trillion COVID-19 plan, which would increase the nation’s minimum wage to $15 an hour by 2025.
“I’m just hoping at a national level the $15 minimum wage does get increased … I think it’s a very much needed act to pass and that’s why I’m standing up and showing businesses how it can be done,” Bueno said.
Not every small business owner shares Bueno’s view when it comes to increasing the federal minimum wage, however. In January, Ohio restaurant owner Adrian Adornetto appeared on “Fox & Friends” to explain how such a policy would impact his business.
“It will do several things to my business and my employees,” he said. “I’ll be most likely cutting hours back. I’m in the pizza business so that $12 pizza might grow to a $19 pizza, and in my part of Ohio, that’s, you know, very expensive in today’s standards.”
Adornetto is not the only one concerned with the “ripple effect” of a federal minimum wage policy. Brad Polumbo, an opinion editor at the Foundation for Economic Equality, expressed similar sentiments regarding the policy’s potential consequences.
“The Targets and Walmarts of the world might well be able to weather a huge spike in labor costs, but countless thousands of small businesses would not survive it,” Polumbo wrote in a January Op-Ed for the FEE.
“Overall, this would be bad not just for impacted entrepreneurs whose businesses go bust, but for the communities their businesses sustain and the workers they employ, not all of whom would find other work,” he wrote.
“Meanwhile, big chains and corporate giants would have less competition, eventually allowing them to jack up prices and consolidate market share.”
Polumbo also cited a 2019 study from the nonpartisan Congressional Budget Office, which estimated that a federal minimum wage would eliminate 1.3 to 3.7 million jobs nationwide.
“Biden’s proposal for a federal $15 minimum wage and its companion legislation introduced by House Democrats might please labor unions and the Democratic base,” Polumbo wrote.
“But there’s really no question that it would screw over small businesses at the worst possible time.”
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