By Susan Adams
Forbes, March 31, 2016
Rick Karp calls himself a “bleeding heart liberal.” He’s a member of Business for a Fair Minimum Wage, a national non-profit that supports hikes in the minimum wage, including $15 in California, New York and Washington, DC, and a $12 federal minimum. At Cole Hardware, the San Francisco-based chain of five stores he took over from his father in 1978, Karp, 64, has long made a point of setting compensation for his lowest-paid hourly workers, including cashiers and stock clerks, above the required minimum. Among his staff of 124, he has 10 full-timers and three part-timers who make $13 an hour, .75 above the current $12.25 minimum in San Francisco and .45 above the $12.55 minimum in Oakland, where he has one store.
But now that California governor Jerry Brown has reached a deal with state lawmakers to adopt a $15 state minimum as of 2022, matching the minimum San Francisco is already set to enact by July 2018, Karp wonders if he can continue to pay above what the law requires. ...
“We’re going to make it work,” says Karp. “We’re going to continue to thrive.” ...
San Francisco was one of the first US cities to pass a $15 minimum, through a ballot initiative in November 2014, when the city’s wage floor was $10.74. That measure raises the minimum in increments, culminating in $15 in July of 2018. In addition, under a 2006 law aimed at providing health care to everyone in the city, SF businesses with 100 or more employees, like Karp’s, are required to pay at least $2.53 an hour toward each worker’s health care. ...
At Cole Hardware, Karp says his 2015 revenue reached $15 million while wages and benefits accounted for 30% of his overhead. As SF’s minimum wage rises to $15, he plans to hike wages for his 86 full- and part-time workers who now earn between $13 and $18. ...
Because he competes with Amazon’s low prices on almost every item he sells, Karp says he can’t simply raise prices. ... To compete, Karp says, “I want my employees to provide the best customer service possible and in order for them to do that, I need to do whatever I can to make them as happy as possible.” That means offering health and dental insurance, nine paid days off a year plus vacation, and above-minimum wages. ...
Even so, Karp says he still favors the $15 minimum: “The cost of living is so high here, it’s very hard to live on minimum wage in San Francisco.” He’s especially pleased that the statewide minimum is likely to match the city’s, requiring competitors like Amazon to pay their warehouse staffers as much as he pays his cashiers. “There needs to be a level playing field,” he says. “I think a federal minimum wage of $15 would be great though I don’t think our crazy Congress will do that.” The higher minimum can also have benefits for retailers like him, he believes. “When people make more,” he says, “they spend more.” ...
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