With many businesses in Newport County offering entry-level positions at minimum wage, a potential wage increase from the state legislature has left the business community with mixed feelings.

In February, the Rhode Island Senate approved legislation that would steadily increase the minimum wage to $15 an hour by 2025. As the bill now makes its way to the House, it has stoked conversation among Newport County’s business leaders over the benefits and disadvantages of this wage increase.

“We do obviously recognize the need to pay healthy wages, however, those businesses that have been most hardest hit during the pandemic are also those who will be extremely adversely impacted by another increase in minimum wage,” said Erin Donovan-Boyle, executive director for the Greater Newport Chamber of Commerce.

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The chamber released its official stance on the issue in February, issuing a call to action to local business leaders to contact their representatives should they be against the wage increase. In the email, the chamber argued the timing of the legislation, which would increase Rhode Island’s minimum wage to $12 an hour this October, would negatively impact local businesses as they recover from the pandemic.

“Hospitality and tourism certainly have been hardest hit, and there are positions within the hotel staff and those types of organizations that may be impacted, but it's the main street mom-and-pop in particular that have minimum staff, lots of turnover, that really provide those entry-level positions and those would be most impacted,” Donovan-Boyle said.

“Additionally, we are concerned that so many changes have already been made for businesses to adapt to current situations, and lots of layoffs have already taken place. Adding an additional cost could hinder those businesses, and their capability to take those employees back.”

 

Donovan-Boyle said the chamber is not against bumping up the minimum wage, but raised concern about how the wage increase in the bill was calculated. She said a formula should be created that takes into account an establishment's attributes instead of a blanket minimum wage across all industries.

The chamber signed a written testimony with other chamber leaders and had representatives verbally testify against the bill. When the chamber sent its call to action for members to participate, Donovan-Boyle said she received support as well as pushback from chamber members.

 

One of the business leaders who disagreed with the organization's stance, Jay Lasky, owner of Helly Hansen on Thames Street, said he wrote a response to Donovan-Boyle.

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“A philosophical thought on wages in general from my perspective would be: It's a challenge to find great talent if you're not willing to pay for it,” Lasky said.

As a member of the chamber, Lasky said he just offered his opinion on the matter after the chamber sent its email. One of the issues he has with the opposition to the wage increase is the argument that raising the base wage will increase the cost of higher positions and result in job losses, as businesses are unable to afford the newfound labor costs.

“I don't see how that happens because whether you're retail, restaurant or manufacturing, you need X amount of bodies to produce X amount of production,” Lasky said. “I mean, what are you going to do, cut your cashier? Who's gonna ring up the sales? You're going to cut your serving staff or the back of the house staff in a restaurant? No. I mean, I have a hard time understanding that concept.”

Lasky said he supports the legislation as someone who pays his entry-level staff above Rhode Island’s minimum wage. He sees the wage increase as a way to bring better employees and businesses into the state.

“If Rhode Island is ever going to restock the workforce, how do you do that? You can't do it by offering less,” Lasky said. “I'm in favor of any legislation that can bring in a stronger workforce, because to me — if it's $15 an hour or $14 an hour or $16 an hour — the most important thing is the ‘if you build it they will come’ attitude.”