[Tidybuoy]

I used to work for Gottschalks Department Stores. I was there for 21 years and my last 10 were spent planning & forecasting. Part of my job was to set the budgets for store payroll.

When minimum wage went up one year, I calculated the annual cost to the company would be about $1.5 million dollars. My annual store payroll budget was about $80 million.

That year, we ended up cutting head count to make up for the $1.5 million that would be spent increasing wages. We had no choice as retail competition was fierce. We were up against companies like Macy's, Penny's, Wal-Mart, Target, Costco and those companies were so much larger than us that they were able to buy merchandise at a much lower cost than we could get.

If you look back in time, you might remember when you got service at stores. Now days, you can barely find a clerk. Checkouts are all becoming Wal-Mart style and there is virtually no one in a store to help you. This is a direct result of higher costs (payroll and other).

Minimum wage might not be keeping up with inflation but my question is: why is inflation increasing so much? We have an extreme % of population not working, collecting govt subsidies, etc. At the same time executive wages have skyrocketed. I would not be focusing on raising the minimum wage but instead working on the top wages. I would let a company pay their execs any amount they want but limit the tax deduction for any single employee to $100,000.

FYI: The $1.5 million minimum wage effect was about 1/2 our annual profit. The company never paid out a dividend and used all profits to reinvest in the business and open additional stores. We employed about 6500 employees and each new store opened employed 75-200 people.


Just my $0.02 worth