Minimum wage hike creates maxium stress for some business owners

SUTHERLIN — Dave Pedotti is getting used to washing dishes at his restaurant.

With the economy being what it is, and the state minimum wage increasing by 45 cents to $8.40 on Jan. 1, Pedotti figures he’ll be washing dishes a good while longer.

Down to one dishwasher, the owner of Pedotti’s Italian Restaurant in Sutherlin now washes dishes two nights a week to save money on the payroll. He laid off a part-time dishwasher two weeks ago and has put a freeze on wage increases.

Pedotti and his wife, Renie, have also picked up three days of prep cooking in the kitchen. After 12 years of business, the Pedottis haven’t had to jump on the kitchen line in years.

However, the struggle of paying workers has them jumping on different tasks in all departments.

And Dave Pedotti isn’t sure where he’ll make up the difference from paying higher wages when fewer customers come through the restaurant’s doors because many people have tightened their budgets.

“I can’t pass it on anymore,” he said, noting that in the past he had increased certain menu items by 10 cents or 20 cents, depending on the jump in hourly wages.

With rising food costs, suppliers are also making it hard on restaurants by passing on higher fuel surcharges. And Pedotti said he won’t cut quality by changing menu items or food supplies, and there’s certainly nothing he can do about basic bills, like natural gas and electricity.

“Where else can we cut but our labor?” he said.



Minimum wage in Oregon has been on the rise for the past six years. During that time, the most it increased was by 30 cents in 2007.

The 45-cent increase for 2009 will be the largest wage jump in the state since it jumped by 50 cents to $6.50 in 1999.

As the economy slumps and banks and other financial institutions have been issued a $700 billion bailout by the federal government, Pedotti said the least state government can do is issue a freeze on the minimum wage increase.

But that would take an act of the state Legislature.

Passed by voters in 2002, Ballot Measure 25 calls for annually adjusting the minimum wage based on inflation that’s measured by the Consumer Price Index.

The state Bureau of Labor and Industries adjusts the minimum wage for inflation every September, rounding it to the nearest 5 cents.

“By helping workers and their families preserve their purchasing power in difficult times, our strong minimum wage law also benefits our local economies, where workers spend most of their paychecks,” Commissioner Brad Avakian said in September.

Small business owners like Pedotti, however, say hourly wage increases are counterintuitive during tough economic times. Fewer jobs are filled and many workers see their hours reduced.

House Minority Leader Bruce Hanna, however, says he is working on a bill that he will introduce when the Legislature reconvenes in mid-January that would freeze wage increases during downturns in the economy.

“In times of recession — when businesses are struggling — the minimum wage would be held where it’s at,” said Hanna spokesman Nick Smith.

In 2003, Oregon Republicans introduced a bill that would have deleted the wage-index law, passing it in the House but watching it fail in the Senate.

Smith said it would be difficult to introduce a similar bill in a Democrat-dominated Legislature. But the Hanna bill would work to prudently give employers a break during a recession and still allow for minimum wage growth when job growth is healthy.

At Pedotti’s, the waitstaff on Friday and Saturday nights has been reduced from three waitresses to two. Though Dave said that is also due to slower business, he’s capable of helping out for an hour or two during unexpected rushes instead of keeping an extra waitress on the clock.

“I’m not the best waiter in the world but I can get it done,” he said.



• You can reach reporter Adam Pearson at 957-4213 or by e-mail at apearson@nrtoday.com.