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Employers: Wage hikes boost morale, applicants

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While politicians debate the minimum wage, businesses are already moving to bump up pay for their lowest-paid workers, including many in Central Pennsylvania.

Local companies hear the political noise and read the proposals to raise the state and federal minimum wage above $7.25 per hour. They see how national and international employers are responding to worker rallies calling for higher wages, and what major metropolitan areas and other states are proposing or enacting for starting pay.

One of the recurring arguments is that wages have not kept up with the pace of inflation.

For employers, however, it's a matter of keeping up with the competition.

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“We always want to be the employer of choice,” said John MacDonald, a spokesman for Giant Food Stores, which is part of Ahold USA's Carlisle division, which also includes Martin's Food Markets.

Retail push

In the retail industry, where lower wages and part-time workers are abundant, questions about the minimum wage are a constant.

In April, Giant/Martin's announced it was raising the starting associate wage to $9 per hour, beginning June 7.

That impacted about 10,000 part-time associates in the nearly 200-store chain, which has 33,000 employees overall.

Competitor Weis Markets announced a move to $9 per hour in May, a change that takes effect on Aug. 2 and affects 163 stores.

Both cited the need to remain competitive and said the move would not impact store prices. In the grocery business, sales margins are already tight.

“In order for us to keep momentum and have people choose us and get them in the store, we felt it was really necessary,” MacDonald said.

Employers such as Giant and Weis are flooded daily with applications. And starting pay is certainly something applicants take note of as they decide where else to apply or what job to take, if they have options.

“We continue to see a steady stream of applicants for jobs,” Weis spokesman Dennis Curtin said, calling the pending move a positive for the organization and its associates.

MacDonald said it's an issue that Giant will likely revisit again over the coming months. It's an issue that always has the potential to move past legislative hurdles around state budget time.

“While minimum wage is not directly a part of the budget talks, it could find new traction with budget developments,” House Democratic spokesman Bill Patton said. “That's what happened the last time Pennsylvania raised its minimum wage in 2006. That bill had been stuck for months, but suddenly got moving in late June and passed within two days of the budget itself.”

In Pennsylvania, the favored measure among Democratic lawmakers is a bill setting a $10.10 minimum wage bill. Introduced by Harrisburg Rep. Patty Kim, the bill would take the minimum wage up in steps.

Related proposals go higher than $10.10.

Other employers

Stauffers of Kissel Hill, the Lancaster County-based supermarket and home-and-garden retail chain, also bumped its minimum hourly pay to $9 in May.

Hampden Township-based nonprofit Community Aid Inc., which is expanding its thrift store chain to Lancaster County, took its starting pay to $10, plus it added a 401(k)-style retirement plan.

“We wanted to improve today and be able to improve tomorrow,” spokesman Bob Hauer said of the move, which impacted the first pay period in June.

Community Aid has 36 employees at $7.25 per hour. Another 135 of its 200 full- and part-time workers were under $10 per hour.

Workers who were at that level received an hourly bump of 50 cents.

“This is closer to what is seemingly coming down the pike,” Hauer said, citing the $10.10 figure that has been bandied about in Pennsylvania. “We ultimately had to prepare our business for where the future is headed. And we have capacity to do it now.”

On the retirement program, the faith-based nonprofit is matching the first 3 percent of employee contributions and half of the next 3 percent, Hauer said.

“It's certainly costing more on operations,” he said, though he was unable to provide specifics. “The effect is what you would expect. Employee morale has increased.”

Applications also are on the rise, he said.

“I hope it shows (other employers) that when push comes to shove you can make a decision to make your employees' lives better,” Hauer added.

Since 2009, Community Aid has given more than $5.3 million in contributions to other local nonprofit organizations. <

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Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin and Cumberland counties. Have a tip or question for him? Email him at jscott@cpbj.com. Follow him on Twitter, @JScottJournal.

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