CHICAGO — The cost of labor is one of the largest line items in a laundry/linen service’s budget.
That being said, more than 45% of operators support minimum wage increases, according a recent Your Views survey conducted by American Laundry News.
“Laundry is not an easy job and laundry workers are exposed to hazards other career fields aren’t,” a respondent shares. “Although laundry is considered a low-skilled job, the advances in technology and the demands of the customers requires an experienced and engaged workforce.”
When asked if they support minimum wage increases, in general, 19% of operators who took the survey “strongly support” increases, while 26.2% “support” them.
More than 33% indicate they either “oppose” or “strongly oppose” minimum wage increases in general. About 21% say they are neutral on the subject.
Some of the reasons respondents say they support/oppose minimum wage increases include:
- Workers need to make a decent wage to support their families.
- A living wage should be a right. The tax cuts are not filtering to workers, so this must be legislated.
- I support the minimum wage increase, but there needs to be an offset to our increasing healthcare cost and insurance costs.
- It hurts the working families, as positions that should receive higher wages cannot because entry level wages are higher
- There is a max amount people are going to pay for certain items. So, for example, if minimum wage increases causes a fast food hamburger [wage] to go up to $15, a lot of those places are going to go out of business, and then there will be less jobs overall. Plus, companies are already automating functions to eliminate staff, such as online ordering/app ordering for restaurants.
- The market should determine labor prices. Artificially increasing the cost of low-end labor causes inflation and lower employment levels, especially at the teenager and unskilled labor market.
- Wages do need to increase, but not to the extreme that is being proposed.
- We all should try to pay our workers a wage that allows them to live life. That being said we should also understand what an entry level job is, and the amount of training that is necessary (practically none) to work in a laundry.
Nearly 71% of those who took the survey indicate that they don’t support legislation in Congress to raise the $7.25/hour Federal minimum wage to $15/hour by 2024. Nearly 27% support the legislation.
In addition, the majority of survey takers (62%) indicate their state or region is considering minimum wage increases. Almost 24% say increases aren’t being considered, and 14% don’t know if their state/region has such a proposal.
So, how much of an increase in the minimum wage (per hour) would respondents support? Nearly 20% indicate $4 per hour or higher, 14% would support $3 per hour and almost 17% say $2. More than 14% indicate they wouldn’t support any increase, and almost 12% would support a $1 an hour rise.
Other responses to the question include:
- The market should set the rate.
- Inflationary annual adjustment tied to regional governmental CPI adjustments.
- No increase. It is a false hope they are feeding the uneducated labor force to believe a higher wage will work. It will just become the new poverty level.
- Small increases overtime.
- Let the market decide.
- In the $11-$12 range.
- New York is at $12 and going to $15, without offsets. This will only result in finding ways to be more efficient, which will translate into less jobs.
Of course, a laundry would likely have to cover the cost of a minimum wage increase, and more than 26% of survey takers would raise prices to cover the increase. More than 14% would cut costs elsewhere, while nearly 12% say they wouldn’t be affected. Other options include reduce workforce (9.5%), reduce employee benefit options (4.8%) and seek budget increase from parent institution (2.4%).
The remaining question respondents offer some of the following thoughts:
- Increase automation.
- Would have to look at all costs and cut to save wherever possible without effecting quality of service that we provide.
- Would require attempting all of the above.
- Costs may actually decrease because engaged staff come to work and perform at standards which reduces overtime, OWCP claims and other associated costs.
- I think in most organizations there is waste that can be cut.
Increasing automation seems to be a popular way to offset labor costs. More than 70% of survey takers indicate their operation has further automated to offset costs. Almost 24% haven’t taken steps toward more automation.
When asked, “Do you believe a higher minimum wage would decrease employee turnover/increase employee retention?,” nearly 29% were neutral on the topic, while 26% disagree. More than 16% strongly agree with the statement, and almost 12% agree.
Just about 16.7% strongly disagree that minimum wage increases would decrease turnover/increase retention.
“We recently underwent a wage adjustment program for our hourly employees,” writes a respondent. “Every employee received a $2 increase, then, based on seniority, employees received additional increases, some in the $4 range. We increased our starting wage by $1.20 and plan to increase it another $.80 on July 1, 2019.
“In over one year it has had absolutely no effect on our staffing. In fact, we have had open positions for 6 months.”
Another shares, “I pay more and have zero turnover. I don't have to concentrate on hiring and training. I can concentrate on sales and marketing, thereby making my business stronger and able to keep increasing the employees’ compensation and the business bottom line.”
While the Your Views survey presents a snapshot of readers’ viewpoints at a particular moment, it should not be considered scientific. Due to rounding, percentages may not add up to 100%.
Subscribers to American Laundry News e-mails are invited to take the industry survey anonymously online each quarter. All managers and administrators of institutional/OPL, cooperative, commercial and industrial laundries are encouraged to participate, as a greater number of responses will help to better define operator opinions and identify industry trends.