Impacts of a $15 minimum wage on the cleaning industry in Portland
Being a mostly a labor intensive industry, the potential higher minimum wage requirements could have a wide impact on the way we do business. We most likely will have to raise rates for our clients.
The good news is that all facility managers and business owners will know that we are all in the same boat. Switching to another competitor will not change the problem. Everyone will be bound to the new higher wages.
It will be important for cleaning companies and facility managers to talk keep costs down. Cleaning companies will have to be more efficient than ever by doing anything they can including minimizing supply costs and management overhead.
Higher wage industries like office clients in the professional and technical services, information, finance, and utilities would have nominal impacts. It may just impact 1 percent of revenue with them. But any labor contracts like janitorial work will have an impact on their bills.
Economic studies have shown that increases to the minimum wage have not been a disruptor to the U.S. economy. Businesses have gotten by through lower employee turnover, improvements in organizational efficiency, and small price increases. These adjustments have been sufficient enough to avoid job cuts, even with business with a large share of low-wage workers.
We will have to see how this social experiment works out with the higher minimum wage. The idea is that these lower income workers will have a living wage that allows them to spend more. The people at the lower end spend most of their income and the idea is that business will have more clients and goods sold because their customers will have more to spend.
One concern you will have is that in a lot of places of work, many will be making the same hourly rate as a janitor! New hires will have the same hourly rate. So will dishwashers, cashiers and so on. So until inflation finally catches up many years ahead. Until then this wage hierarchy will be destroyed by $15 hour.
We will see how this $15 plays out now on the west coast as California, Portland, and Seattle have implemented wage increases. Just know that facility managers will know that we are all in the same situation. Keep an open line of communication to reduce the impacts and keep everyone as happy as possible.