South Dakota voted last November to raise the minimum wage from the federal floor of $7.25 to $8.50. That raise took effect Thursday. Mork, Madison Dairy Queen owner and president of the South Dakota Retailers Association*, tells NPR that the minimum-wage increase approved by voters is forcing him to raise everyone's wages at his shop:
DELON MORK: I've got about seven full-time people. And I've got 25 part-time kids ranging from minimum wage up to about $16 an hour.
RATH: Mork says the new law adds to his expenses in other ways. To be fair to his non-minimum wage employees at the Dairy Queen, he'll have to raise wages for everyone.
MORK: I can't narrow that gap from the 16-year-old student that is getting their first job that, quite honestly, doesn't know what end of the broom to hold onto to sweep. I can't compress the wages from that person to my experienced college-age night manager. I can't narrow that gap, so everybody moves up [Arun Rath, "Minimum Wage Increases Across U.S. Affects [sic] Wide Range Of Workers," NPR: All Things Considered, 2015.01.03].
That's Mork, master of sales, at work. We need to make policy by big picture facts, not anecdote. Mork knows that 78.3% of workers making minimum wage in South Dakota are 20 or older. Mork knows that state and federal law allow him to pay teenagers a training wage (the state Department of Labor calls it an "opportunity wage"). He knows that all of his competitors face the same wage hike, so he faces no new competitive force. And he knows that all the other workers around town getting a raise will be able to come buy more food at Dairy Queen. But with his brilliant facility with language (and yes, DeLon is good), he frames the entire debate with that one vivid, humorous image of the dopey kid who's never run a broom. We liberals argue with facts and figures; business conservatives like Mork run with darn good stories.
RATH: He'll have to cut hours, he says, and think about trimming back on community service, like giveaway specials or sponsoring kids sports teams [Rath, 2015.01.03].
We can read that as simple, straightforward business logic—less profit margin means less to give away—or as a veiled threat to quit going crazy on Miracle Treat Day. Heavens forfend!
I have a hard time imagining Mork, who is both a decent guy and a shrewd businessman, dropping his community service activities and the bountiful good will it buys him without seeking other, less grouchy ways to balance his budget. But if he does scale back Miracle Treat Day or sponsor one less Little League team, he has the perfect public excuse. Every business owner in South Dakota can spend the coming year shifting the blame for every cutback and misfortune onto the voters of South Dakota.
Whatever changes come in the Madison Dairy Queen's community service, Mork is making sure voters see the impact of their decision right now on the menu:
RATH: And, of course, his prices are going up.
MORK: Probably my largest price increase ever. My Blizzards went up 20 cents. $2.99 went to $3.19.
RATH: Those new prices start today.
MORK: I kind of am looking forward to people's reaction when they see the prices are up if they correlate the difference for the prices to the minimum wage increase that they voted on a couple months ago [Rath, 2015.01.03].
Blizzards up 6.7%? 20 cents for one ice cream treat to dignify each worker with a better minimum wage? That seems a small price for each consumer to pay.
But 6.7% is also a larger price than research indicates is necessary to pay for this wage increase. One analysis based on five empirical studies of minimum-wage increases on fast-food restaurants indicated that raising the minimum wage to $10.50 would raise costs at fast-food restaurants just 2.7%, or, on Madison's favorite Blizzard, eight cents. Other researchers found that a 10% increase in the minimum wage translates into a 0.9% increase in the price of burgers at McDonald's. We just raised South Dakota's minimum wage 17.2%; burger prices should thus go up 1.6%.
And while I can't attest to the updated accuracy of these data, FastFoodMenuPrices.com lists the average price of a Blizzards in South Dakota at $2.69 for a mini and $3.69 for a small. In Washington State, which raised its minimum wage to a nation-leading $9.32 an hour in 2014 and, the mini Blizzard is $3.15 and the small $4.32. (Washington's index has raised its minimum to $9.47 this year.)
But there I go talking research and statistics again, while that pimply-faced kid who can't tell the business end of a broom is getting a whopping $8.50 an hour.
DeLon Mork is a good businessman and a good guy. He treats his workers and his community right. He'll survive the minimum wage increase, as will Miracle Treat Day and everyone Mork helps.
And in less than a week, he'll turn that kid into a sweeping machine who earns every penny of that minimum wage.
p.s.: DeLon Mork represents Madison in the national media twice in three weeks! Wow! He must be laying the groundwork to run against Jeb Bush. And notice that, unlike sports hit-piecer Nigel Duara, NPR's Arun Rath saw no journalistic need to mention Mork's name or comment on his Midwestern accent (and seriously, what accent?).
*Update 09:48 CST: Mork and his fellow retailers fought passionately against Initiated Measure 18, the ballot measure that raised the minimum wage. Below is the text SDRA posted to its website in opposition to raising the minimum wage:
Initiated Measure 18
In November of 2014, South Dakota voters will decide whether to mandate a 17% increase in the minimum wage, PLUS mandate automatic annual increases.
The South Dakota Retailers Association opposes #18. We are part of a grassroots coalition (representing small business and family farms) which is working to defeat this measure.
Ten Reasons to Vote No on #18
There are many reasons we believe this proposal should be defeated. Here are ten of them:
- It would be the single LARGEST minimum wage hike in South Dakota's history.
- Will trigger higher prices, lay offs, cuts in hours for workers, reduced employee benefits, and delays in making needed improvements.
- Mandates raises tied to the National Consumer Price Index- every year - FOREVER, even if South Dakota's economy is suffering a downturn.
- Automatic raises would be set by the economies in New York and California and other states, not by what's happening in South Dakota or the Midwest.
- Young and unskilled workers could lose out on jobs, along with the opportunity to gain valuable work experience.
- If the starting wage goes up 17%, experienced employees may not get raises they deserve.
- Employers who can afford to are already paying more than the minimum wage to attract and keep employees in a competitive market.
- South Dakota's minimum wage would be higher than 43 other states as of January 1, 2015.
- Hits small towns hardest. When prices have to go up to cover increased operating costs, it drives customers elsewhere.
- If this passes, what's next? Do we really want to set employer policies at the ballot box?
Learn more about this issue at NoMoreMandates.org.