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A Small Business Owner's Perspective: "A High Road on the Minimum Wage"

Paul Saginaw, co-founding partner of the Zingerman's Community of Businesses, makes the case for raising the federal minimum wage.
President Barack Obama and Rep. Gary Peters, D-Mich. stop for lunch at Zingerman's Delicatessen in Ann Arbor, Mich., April 2, 2014.

President Barack Obama and Rep. Gary Peters, D-Mich. stop for lunch at Zingerman's Delicatessen in Ann Arbor, Mich., April 2, 2014. (Official White House Photo by Chuck Kennedy)

My partner, Ari Weinzweig, and I never subscribed to the conservative economic theory of Milton Friedman, that “the business of business is business.” To us, the right to conduct business is earned by being a good corporate citizen — by producing products and delivering services responsibly, hiring responsibly, generating profits responsibly, and finally, sharing profits with those who help produce them and with the wider community from which the revenues are drawn.

For more than three decades, our successful businesses have been profitable but never by underpaying our employees or withholding benefits. In fact, my 17 partners and I have always paid wages above the federal minimum and offered company-subsidized health care and paid time off. Rather than obstacles to profit, higher wages and benefits are profit enhancers. Good wages and good profits are interconnected because higher wages are directly tied to reduced business costs. Higher wages enable employees to be attentive and consistent in attendance and performance due to their abilities to meet transportation, health, and housing needs.

I would be an irresponsible employer if I provided jobs that could not support housing stability and health security. Currently at Zingerman’s, we have achieved consensus to gradually raise wages for all our base pay employees to a “thrive-able” level and increase the opportunity for employee ownership of the business brand. We’re motivated to invest in our employees, not in lobbyists who represent our industry associations that work to keep wages low.

I hear many in the restaurant industry say raising menu prices will result in customer loss and diminished profits, but I reject that and question the scale of those profit margins, wondering if the margins are maintained by shorting their employees. Customers have voted with their pocketbooks for locally sourced, organic, and free-range products. Now is a prime time to educate “voters” for ethical employment practices as well.

Many myths about the industry workforce and the minimum wage create a false reality and highly unproductive debate. The truth is that livable wages and profits are not mutually exclusive, and Zingerman’s are not the only businesses to know this and operate accordingly. RAISE, an alternative restaurant association, is aligning businesses across the nation to adopt “high road” labor practices. Zingerman’s Community of Businesses joined. I sense that there is public readiness to join this growing business leadership and leverage its consumer dollars to “vote” for raising standards for workers.

My organization backs me as a spokesperson for Business for a Fair Minimum Wage (BFMW). I represent my partners and more than 600 Zingerman’s employees whenever I engage with state and federal legislators. My interviews in print and on radio, responses to emails and phone calls, published op-ed in The Detroit News, and participation in a roundtable with Secretary of Labor Tom Perez have all intensified my belief in the urgency of this issue and the need for long overdue, humanizing change. Every day, I am pained and motivated by the cruel irony that many of the 13 million women and men who produce and serve food in my industry are forced to use federal food stamps to feed themselves and their families. Change is needed now.

Paul Saginaw is Co-Founding Partner in the Zingerman’s Community of Businesses, a unique structure of mission-driven, interconnected yet separate, owner-operated businesses that share the Zingerman’s brand and wide recognition for being one-of-a-kind and locally based.

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