Column: ‘Fight for $15’ creates an uphill battle

By Lenny Verkhoglaz

As this year draws to a close, I realize how bittersweet the dawn of 2016 may be for many business owners facing higher minimum wage mandates in their cities or states.

As the owner of a home health care company that employs more than 500 people, including nearly 50 at our Fairfield office, I can relate. On one hand, I am entirely supportive of paying workers a fair rate to provide them a comfortable standard of living. On the other, I am preparing for the consequences that rapid minimum wage increases can have on businesses and local economies.

Many cities throughout the country have already implemented a $15 hourly minimum wage, but at what cost? Seattle, one of the earliest cities to enact the wage standard, is already witnessing restaurant and business closures right and left because owners simply can”™t afford to maintain steady operational costs with the dramatic rise in employee pay. Just weeks ago, one Manhattan restaurant group began raising its menu prices and disallowing the tipping of its servers in order to compensate for the new $15 minimum wage requirement.

Stories like these are becoming all too customary. For every restaurant, home health care company or other small business that is compelled to raise its minimum wage rate, many others will be facing the possibility of shutting their doors for good as a result. The cost to consumers will spiral out of control, and workers will not be able to get the number of hours they need or have previously worked. And, if it”™s occurring in large metropolitan cities, it will most definitely permeate into the nation”™s small towns and smaller economies.

In terms of home health care, the move to a $15 hourly minimum wage will hurt businesses, their clients and the patients they serve. The equation is simple: increased wages mean increased costs to the home health care provider, which results in increased costs to the client. It”™s elastic only up to a point; at some point there will be an issue with people paying more money for the same level of care.

Some cities and states have opted to implement automatic, yearly increases instead of a one-time wage hike. Our office in Fairfield, for example, has a current minimum wage of $9.15. In January, it increases to $9.60, and then it will finally hit $10.10 in January of 2017. We want to pay our workers fairly, but increases like these are artificial pricing ”” what we are actually saying is anyone can make $30,000 a year, whether they are a college graduate, a restaurant worker or a home health care provider. There”™s no market driving the economic forces and labor loses in the long run.

With more money to spend, people will, in theory, have more money to put back into the economy. The idea makes sense: the more money available to people in minimum wage positions, the better quality of life will be available to them and the more the lower socioeconomic layer will be able to advance itself. But, as the costs to businesses rise due to rising minimum wage levels, so will the cost of living ”” and so the cycle continues.

Every hard-working person in this country deserves the opportunity to be compensated fairly for the contributions they make to the American economy. Drastically increasing the minimum wage standards is not the way to achieve it.

Lenny Verkhoglaz is the co-founder and CEO of Executive Care, a New Jersey-based home care franchise offering skilled medical and nonmedical care. He founded the company in 2004 with his wife and brother-in-law. He can be reached at 855-393-2372.