A Pennsylvania ice cream shop found itself struggling to remain staffed with employees. So they raised their minimum wage from the federal minimum of $7.25 an hour to $15 an hour – and received over 1000 applications in the course of a single week.
Jacob Hanchar, the co-owner of Klavon’s Ice Cream Parlor in Pittsburgh, sat down for an interview where he talked about how the decision to raise the wages of his employees had paid off in a myriad of unexpected ways. When asked if it was hard to run a profitable business that had doubled its payroll, he responded:
Well, yes and no. So, from a top-line perspective, we have more people coming into our shop as a result of raising our wage because people want to support a business that is taking care of its employees. Also, our cost is going down as a result of less turnover. And we have not raised prices. So at the end of the day, I haven’t noticed a difference in our bottom line.
Other observations by Hanchar include better service given by happier employees and far less turnover. Hanchar describes having workers poached by other employers offering higher compensation. The cost of retraining new employees decreased when more employees elected to stay.
Right now in the market, better employers are paying higher wages, so I was losing some of my better employees to better employers.
Watch the full interview here.