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STAFF EARNINGS: Officials at Hamra Enterprises, which operates Wendy’s restaurants in Springfield, say their employees all earn over the state minimum wage.
Tawnie Wilson | SBJ
STAFF EARNINGS: Officials at Hamra Enterprises, which operates Wendy’s restaurants in Springfield, say their employees all earn over the state minimum wage.

Impact of latest minimum wage hike minimal, local biz leaders say

Officials expect economic pressures will continue to boost pay for workers

Posted online

While Missouri’s minimum wage hit a new high for the eighth consecutive year on Jan. 1, several local business leaders say their companies aren’t feeling the sting.

The wage increased to $12.30 per hour from $12 – an amount that has risen by $4.65 an hour since 2016. Most of that latter number is tied to Proposition B, a ballot measure approved by voters in 2018 that saw the total increase annually by 85 cents an hour until 2023. After last year’s hike, the minimum wage rate is now based on the increase or decrease in the cost of living in accordance with the Consumer Price Index, according to the Missouri Department of Labor and Industrial Relations.

Roughly 1,830 of Hamra Enterprises LLC’s 7,400 employees work in Missouri, according to company officials. Hamra Enterprises operates nearly 200 restaurants in 11 states under the Panera Bread, Wendy’s and Noodle & Co. brands, said Simeon Shelton, president and chief financial officer.

“Our practices have been that we’re hiring above minimum wage, so we don’t expect very much impact from that,” he said. “In the past couple of years, we’ve just been at a place where we’ve been paying more than minimum wage as a starting point.”

The hourly entry-level pay depends on the location in Missouri, Shelton said, adding it ranges $12.50-$15. In Springfield, the pay is roughly in the $12.50-$13 per hour range.

“We’ve seen over the past couple of years pretty significant growth in wage and I don’t know that that was all a result of minimum wage increasing,” he said, noting the company evaluates employee pay multiple times per year. “It was just more we made the choice to start increasing wage, and part of that’s just our philosophy is we want to make sure that we’re competitive with the market. Then also we want to make sure we’re doing the right thing by employees.”

The median hourly wage for all occupations in the Springfield area was $18.63 in May 2022, according to the most recent U.S. Bureau of Labor Statistics data.

Keeping competitive
Shelton said wages are an important part of conversations the company has with its employees, noting the restaurant industry has been competitive the past several years to attract and retain talent. However, he said pay is hardly management’s sole focus with its workforce.

“We spend a lot of time focusing on providing a good place where people want to work and want to stay and they feel like they can stay and have a future,” he said, adding benefits include free meals, referral bonuses and tuition reimbursement. “And we do a lot of things to provide room for advancement in our organization.”

On Commercial Street, Lyle Foster has been a small-business owner since 2007, when he opened Big Momma’s Coffee and Espresso Bar LLC. Between Big Momma’s and restaurant Queen City Soul Kitchen LLC, a venture he co-owns with Francine Pratt, Foster employs 19. He said the two newest employees at Big Momma’s both are paid minimum wage and thus received a pay hike at the start of the month.

“We made the decision to just give a little tiny increase to everybody at Big Momma’s,” he said, adding the employees all received around a 3% raise. “It’s just based on things are tough out there, and our entry-level employees are getting a little bump. Let’s get everyone a little bump.”

Foster said it’s tough for smaller shops like his to compete for employees against bigger chains in restaurant and retail who can offer signing bonuses and other incentives, while paying well above minimum wage. That makes offering a welcoming environment and culture an important part for employers to consider for employee attraction and retention.

“In some cases, I see people may even be in places that don’t pay as much, but the environment, the mission, the location, the vibe, if you will, is appealing,” Foster said. “And some people really like working local. There definitely is a cadre of people who say, ‘I like the C-Street environment. I want to be part of that scene.’”

Making gains
While the search for employees is a constant in the health care industry, Mercy Springfield Communities is making some notable gains, said Chief Financial Officer BJ Roberts.

The employee count is roughly 8,800, a 5.5% increase from a year prior, he said.

“In addition to that, our turnover rate has significantly improved over the last year as well. Overall, our turnover rate went from about 27.5% down to 21% over the last year,” he said, noting Mercy’s target goal is 15%. “In our recruitment, our vacancy rate has gone from 16% to 13%. So, that’s almost a 20% improvement in our vacancy rate.”

Roberts said he doesn’t foresee any impact by the new minimum wage, as the health care system increased its lowest starting pay to $15 per hour in 2021 across its Missouri footprint. The increase represented an $18 million investment, and health system officials said it would boost pay for 6,000 of its co-workers systemwide, according to past Springfield Business Journal reporting.

In similar moves around the same period in 2021, CoxHealth and Burrell Behavioral Health also raised their minimum wage rate. CoxHealth moved to $15.25 per hour, while Burrell increased its lowest starting wage to $15 per hour.

However, increasing pay can come at a cost to companies. According to a Springfield Business Journal survey of local leaders last spring, 47% reported employee wages and benefits were the top driver of increasing business costs.

Like health care, banking has always been a competitive industry with recruiting and retaining talent a priority, said Kaitlyn Love, human resources manager at Arvest Bank in Springfield. She declined to disclose the bank’s average starting pay but noted all employees in the Springfield region are making above the minimum wage.

“While benefits and associate perks are always a priority for applicants, we’ve also found that career pathing and associate development is also important,” she said via email, adding staff feedback has led to implementation of several changes to its development programs and some positions.

For example, Love said Arvest recently transitioned all its retail staff from traditional teller and new account roles to new relationship banker positions.

“Within this position are clearly defined training courses and skills that must be built in order to advance within the position,” she said. “This allows associates equal opportunity to grow and progress at their own pace.”

Noting inflation and other economic factors are a concern for all industries, Love said Arvest continually evaluates pay for its employees.

“We understand that inflation and the rising cost of living can weigh on associates and job seekers,” she said. “It’s important to be competitive with salary and benefits, and that has been our focus for many years.”

The U.S. inflation rate recorded a recent high of 9.1% in June 2022, then dipped throughout last year to settle slightly above 3% in the fourth quarter, according to the Bureau of Labor Statistics.

Even with a lower inflation rate and the Federal Reserve expected to begin cutting interest rates this year, which could further help the economy, Roberts said discussions with employees seeking higher wages are unlikely to subside.

“I don’t think the conversation is going to lessen simply due to the workforce demands that we have, with demand exceeding supply that’s out there,” he said.


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