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Why Living Wages are Important for My Workers, Business & the Community

Filed in Minimum Wage By on December 4, 2014

Editor’s Note: The author, Molly Moon Neitzel, is the owner and CEO of Molly Moon’s Homemade Ice Cream, a company comprised of six ice cream shops in Seattle serving homemade, locally sourced ice cream.

Molly Moon's Grand Opening - University Village

When I first decided to open an ice cream shop, I knew that one of my goals would be to pay all of my employees a living wage. So I wrote it into my business plan, along with a few other things that were important to me, like paying 100% of the health insurance premiums for my employees and making sure all my product and packaging was compostable. I had my share of critics; there were plenty of people who said I was crazy, and that I would never be able to make a profit.

Seven years later, my company has grown from one shop with 7 employees in 2008 to six ice cream shops, with just under 100 employees during our busiest months. What I’ve learned is that taking care of my employees and paying a living wage is absolutely the right thing to do, and it’s also good business strategy.

Having a healthy, robust group of employees has a great impact on our community, and goes beyond just writing paychecks. It helps us recruit top talent, and it makes for a more loyal workforce and lower turnover which reduces training costs. Incorporating values into business strategy can also help your marketing plans. I know that, as a customer, I choose to spend money with businesses that share my values and I think my customers do, too.

Many people working full time on today’s minimum wage aren’t able to support themselves. I believe that as a community, we have to be willing to make some changes so that everyone in our city can have a chance to thrive.

I wasn’t the only one in my community who supported this logic. In 2013, a small grassroots campaign started in Seattle to increase the local minimum wage to $15 an hour. I joined in solidarity with that effort and decided to pay all non-tipped employees at least that amount. (Other employees in our company make about $8 an hour in tips, on top of the $9.32 Washington minimum wage.)

Along the path to a minimum wage increase in Seattle, it became clear to us that a consumer-driven economy needs an increase in low-wage earners’ pay, and that a minimum wage increase is  good for business. More money in low-wage workers’ pockets will result in more money spent in all businesses.

molly-moon-10One thing I learned during this campaign was that it’s important for business owners to be aware of the additional costs and rewards that come with raising the minimum wage. I know this may cost me more in the short-term, with significant increases in payroll. But the investment will yield significant rewards for my workers, community and my business’ bottom line. Not to mention my customers – many of whom will also be getting raises, and celebrating with more trips to the ice cream shop.

While $15 an hour is right for Seattle, it might not work for every part of the country. Nonetheless, the current national minimum wage of $7.25 per hour is too low, regardless of what state and city you call home. The national minimum wage needs to be raised to $10.10 to give low-wage workers a much needed boost, and a shot in the arm to our economy.

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Comments (13)

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  1. Mark Hamlett says:

    Thank you Molly. Whether a business owner or a large corporation, greed is not good. Reckless consumption and misuse of resources is harmful. Your business plan and ethics should be taught to every CEO and business owner in this country.

  2. Musa King says:

    living wages actually improve the economic outlook as all will have disposable income

  3. Sandy Thacker says:

    This is all the wonderful attitude that America is known for. Thank you.

  4. Amie Larocque says:

    This is the fix for all of the poverty issues in our world! The best thing about it… it DOES benefit the companies in the long run too. If more businesses could be less greedy and share the wealth, the world would be a rich place all around, not just for a few. This also relies on the consumer paying a fair amount for the goods they purchase, which would be doable when getting paid a living wage. Thanks for sharing ~ in many ways!

  5. Andrew says:

    See, that’s the key though. The business actually has to WANT to pay a living wage. Otherwise, if the business is forced to pay employees more, they take it right back in cutting hours, jobs, raising their prices, whatever they have to do to offset the loss. Then We just end up needing a raise again in a few short years.

  6. You are AMAZING MOLLY MOON ! I AGREE with Mark Hamlett . Your business practice is amazing & should be taught to every business in the country . Will you be staying in SEATTLE, WASH .?

  7. Joan Montplaisir says:

    How much does her ice cream cost? Curious to know if she had to increase the price compared to other ice cream parlors.

    • Martin Schmalenbach says:

      Joan – a good question.

      I guess the answer, at least in part, is that during the worst economic downturn in living memory, Molly’s business grew from 1 shop to 6, and from 7 employees to almost 100. I guess the PRICE is one thing, but the overall VALUE customers get from experiencing Molly’s service and products is outstanding…

  8. Andrea Powell says:

    Well written article, thank you. I first noticed minimum wage was out of sync since the mid to late 80’s…and worse for women was take home pay. Even in one of my first jobs a younger boy made .50 cents more than I did, though he mostly just sat around.

    Small business thrives when people make a livable wage, and employees are happier too! High turnover is a sign the job doesn’t pay well enough, the job environment is unhealthy, or both.

    It’s hard to be happy on a wage that only makes rent and a bag of quality groceries, especially when entertainment, phone, electric, and travel is no longer an affordable option…that is poverty!
    When the wage matches average rental cost or home value cost including property tax offset, healthy groceries, maybe two meals out a month at a family restaurant for two, electric, general home and car maintenance/repair with insurance, and some entertainment expenses… That is a livable wage. Notice I didn’t mention being able to put anything away for retirement.

  9. shawanda says:

    Thank you Molly, I am glad you see it this way because $7.25 is nothing and definitely is not a good living you will still have to work two jobs just to barely get by especially the single parents who does everything on their own….for example I work at a manufacture making $14.56/hr when it’s really a good psy but da work is too hard for the pay you receive I am out if work now because of the job, so its not benefiting me none. I would love doing a job that I love and making good money. Minimum wage need to go up to $10-$15/hr so people will have a comfortable living.

  10. Molly, You are an amazing business owner. Open one in Northwest Ohio and I will buy my ice cream there. I believe in giving back to the people that stand behind working class Americans.

  11. Carol Knapp says:

    Amazing Thank you Molly. You have restored my faith in the American Dream

  12. The Frontier FemiKnowlogist says:

    Molly stated, “one of my goals would be to pay all of my employees a living wage. So I wrote it into my business plan…” Sound business planning is a must. Understanding who your target audience is and that they are willing to pay a price point of $3.75 for a single scoop or $6.50 for a milkshake is paramount to sound business planning. This cannot be legislated.

    Molly further understood that living wages “helps us recruit top talent, and it makes for a more loyal workforce and lower turnover which reduces training costs.” Wages are earned – not an entitlement. Beyond the ability to spell and perform basic math is the need for workers with high work ethics and values. Forcing employers to pay a higher minimum wage allows for a workforce that is desperately unqualified and lacks the motivation to improve themselves.

    Just as demoralizing is offering $9.50/hr with a 4-year degree requirement. When I questioned one such company how employees were supposed to make a living, including paying for that degree, I was informed quite matter of factly that overtime was available. So now you have an overworked, underpaid, unmotivated workforce who is disempowered to put in quality parenting time to ensure the next generation is ready to enter society as productive members who can positively impact their world.

    The Washington Post recently reported, “A new study conducted at Harvard Business School found that Americans believe CEOs make roughly 30 times what the average worker makes in the U.S., when in actuality they are making more than 350 times the average worker. An analysis from last year estimated that it takes the typical worker at both McDonald’s and Starbucks more than six months to earn what each company’s CEO makes in a single hour. People of all ages, education levels, and income brackets, the study found, believe that low-skilled workers are getting paid too little and high-skilled workers are getting paid too much.”

    As I see it, the issues are these, (1) motivate and reward low-skilled workers to increase the skills and abilities that entitle them to higher wages, (2) close the earning gap between the average American worker and their CEO’s. Until we address corporate greed and worker’s entitlement mindset these issues will continue to plague American’s ability to earn a living wage.