Haymarket Cafe to raise its minimum wages

By Anthony Rentsch

(Robert Rigo/Daily Collegian)

Peter Simpson wants to make a statement about minimum wage.

Simpson, who owns Haymarket Cafe in Northampton, plans to abolish tips for his staff and raise their wage to at least $15 per hour, he told the Daily Collegian Friday.

Simpson, whose cafe gets its name from Haymarket Square in Chicago – the location of an 1886 labor rally in support of the eight-hour workday that turned violent – hopes to create a local $15-per-hour-minimum-wage campaign as he prepares to bump up the wage floor for his employees.

His plan is to start at $14 per hour this November and increase pay by a dollar each year until he hits $17 per hour in 2018.

Simpson also has a goal of limiting what he called “wage discrepancy” between the wait staff and those who work in the kitchen, which is why he’s moving to abolish tipping in November.

In order to cover the increased wages and the elimination of tips, Simpson plans to increase prices at the Haymarket – by 10 percent in the cafe upstairs and by 20 percent in the restaurant downstairs.

He said increasing his prices by that much was an intimidating prospect at first. But once he began to think about it in terms of higher labor costs being the norm and needing to raise prices to cover the difference, he accepted it.

Kirsi Leminen, who works in wait staff at the Haymarket Cafe, said the roughly two-dozen employees support the plan. She said the increased wage and elimination of tipping would provide her with a more “sustainable income.”

Leminen also said the wait staff (which might lose a little bit of money because they earn tips, whereas the kitchen staff does not), was okay with moving toward equal compensation levels. She added that having similar wages in the store would make it possible for employees to cross train and help out in other areas of the business.

It’s an idea that Simpson said he has been looking at for the past four or five months. He said the pending compensation changes are reflective of recent academic thought that moving to a $15 per hour minimum wage is feasible.

Robert Pollin and Jeannette Wicks-Lim are co-director and assistant research professor, respectively, at the University of Massachusetts Political Economy Research Institute. In January, they published a paper titled “A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs.”

The paper focused on how the fast food industry could handle a national federal minimum wage increase to $15 over the span of four years without resorting to employment cuts. According to Wicks-Lim, the industry would be able to handle it through lower turnover rates, increases in sales growth and gradual price increases over the four years.

More importantly, she said, the paper’s findings imply that such a minimum wage would be feasible in other sectors of the economy as well, since fast food currently employs the highest proportion of low wage workers.

“I suspect that a business in Northampton could move toward a $15 minimum wage,” said Wicks-Lim, citing the state’s above-average $9 per hour minimum wage and Northampton’s economy.

Pollin also said Simpson’s Haymarket’s sales could go up if he advertises the change as an ethical business move.

“There is something to be said for ethical business because there are ethical customers out there,” Pollin said.

However, Simpson, Wicks-Lim and Pollin believe that it’s possible the Haymarket Café could take a hit at first, especially since Simpson said there are no other businesses in Northampton that will be transitioning to similar increased minimum wage and no tipping plans.

“The first bump in prices is hard and I recognize that,” Simpson said.

The initial price increase could be especially difficult, according to Mukunda Feldman, owner of Northampton Coffee, as customers are looking for local coffee shops to have similar prices to those of chains, such as Dunkin Donuts or Starbucks.

“That’s just crazy, but that’s the reality that we are in,” Feldman said. “Hopefully if there is enough exposure people will understand that (the reason behind the price increases is) a good thing and people will continue to support the business.”

The price increase could be one reason holding other businesses back from integrating similar compensation plans. Feldman, while he said that he supports the $15 minimum wage movement, did not indicate whether Northampton Coffee was considering increasing its wage floor.

However, Simpson is hoping that other local businesses will follow his lead. He is considering closing the Haymarket Cafe early at some point in November to celebrate its 24th year in business and to hold a panel discussion about the $15 minimum wage movement. He added he would like to see the creation of a workers’ guild in Northampton.

Wicks-Lim also mentioned that there is a bill to implement a $15 minimum wage for fast food and big box retail stories being considered by the state legislature. The bill was referred to the committee on Labor and Workforce Development in January.


Anthony Rentsch can be reached at [email protected] and followed on Twitter @Anthony_Rentsch.