THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, May 24, 1996 TAG: 9605240709
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY NANCY LEWIS, CORRESPONDENT
LENGTH: 56 lines
Virginia Beach's Oceanfront tourism industry, just now revving up for its busy summer season, might be the first to feel the financial pinch from a minimum wage increase.
But resort area restaurant and hotel owners say neither they nor their customers will suffer. They'll just be fussier about whom they hire and expect more of those already on the payroll.
Workers questioned this week say they already make more than minimum wage.
The wage increase proposal cleared the House on Wednesday. If passed by the Senate and signed into law by President Clinton, the minimum wage would increase from $4.25 an hour to $5.15 an hour in two steps.
A 50-cent boost would kick in this July 1; 40 cents more, next July 1.
Oceanfront employers often pay at or near minimum to seasonal workers, such as grounds and pool maintenance workers and bus boys.
Those interviewed said they wouldn't let higher payroll costs translate into pricier rooms and meals. Instead, they will be more selective in their hiring, reduce the number of summer employees or increase the workloads of those already on the payroll.
Verne Burlage, owner of the Oceanfront Hilton, said he wouldn't take much fiscal heat from a minimum wage increase, since he already pays his employees more than that. But some of his business peers will be greatly affected, he said.
``They will try to go with less,'' he said. ``Many can do without (the extra help) or work others longer. A lot will say, `cut back,' and they'll bite the bullet.''
Stephen Michaels, an owner of the Atlantic Avenue King of the Sea Restaurant, said increasing the minimum wage would force him to require more of his employees. Raising menu prices is not an option, he said.
``You can only pass along just so much'' to customers, he said.
Michaels worries, though, that an increase in pay for those at the bottom of the pay scale would pressure him to pay more to cooks, bartenders and others.
Hours of entry-level dishwashers will have to be curtailed to compensate, said Michaels. He has no solution for the extra he'll have to pay wait staff, who receive half their minimum wage pay in tips.
Michaels said he hopes government will offer small businessmen like him tax incentives to help offset a minimum wage increase.
Don Faircloth, who manages Surfside Inn, said an increase would make him even more discriminating in hiring.
``Already today, I've interviewed seven and hired none,'' he said Wednesday.
The hotel pays about $4.50 for entry-level housekeepers.
Wayne Smith, owner of Alexander's on the Bay, said he would hire fewer entry-level people. ``I'll pay the more experienced to work longer and faster,'' he said. ``The marketplace should dictate'' wages, he said.
KEYWORDS: MINIMUM WAGE by CNB