Minimum Wage Increases: Spotlight On Independent Retail

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The minimum wage is on its way up.

Thanks to ballot measures across the country making way for living wage laws, 20 states enacted higher minimum wages on Jan. 1. Several others will follow mid-year with increases as well.

What the higher rate means for the footwear industry is as nuanced as the controversy surrounding the issue.

Matt Priest, president of Washington D.C.-based Footwear Distributors and Retailers of America, said the impact of minimum wage cuts widely across the business sector – from small independent retailers to large firms employing hundreds and thousands. Because the industry generally is less dependent on low-wage workers, Priest said the increases weren’t necessarily such a high profile focus.

“It’s hard to say that the minimum wage is 100 percent a good thing or a 100 percent bad thing,” said Priest. “Hopefully it injects a little extra cash into the system, whether it be by the people working at footwear store making more or another person coming into the store because they have a little extra to spend [on shoes].”

Priest explained it was likely that small businesses, with tighter budgets and margins, would feel the impact of the growing wages most.

Based out of St. Louis, independent chain Laurie’s Shoe Center owner Mark Waldman said that minimum wage increases are expected and planned for since the state enacted living wage increases in 2008.

To stay competitive in the industry and keep employees happy, the chain tends to offer more than the minimum wage thanks to benefits.

“[For us] in the long run, we’re not as affected because we’re above [minimum wage],” said Waldman. “As far as expansion and future growth, it could impact us, but I don’t see it. It’s when it makes the leap from $7.50 to say $15 like it did in other places [then the impact is bigger.] Gradual increases we can plan for.”

Waldman said by offering better wages and benefits has allowed him to stay competitive, especially in the growing retail sector.

Peter Hanig, owner of Hanig’s Footwear in Chicago, ran into a unique situation when the city enacted a significant minimum wage increase while the state did not. In July, Chicago’s minimum wage jumps from $8.25 to $10. Hanig said he’s still not sure how it will affect his stores, or if it even will since employees are paid hourly rates and commissions, so most make well over the minimum wage.

“We want our people to make a decent wage and we make significant contributions in other areas [401K and health insurance], so we’re still looking at how other income is taken into account,” said Hanig. He also said that the gradual increase to $13 over the next several years is much easier to bear than a sudden jump.