Jan. 1 saw Washington state’s minimum wage increase 16.15 percent, from $9.47 per hour in 2016 to $11 per hour in 2017.

It’s a move that some in Jefferson County are afraid could indirectly harm the very same struggling employees it’s intended to support, by hampering their employers.

Brian Kuh, director of the Team Jefferson Economic Development Council, acknowledged the challenge of balancing employers’ and employees’ needs.

“It’s clearly important that we see the growth of jobs at livable family wages,” Kuh said, “but the impact of this minimum wage increase is likely to be more pronounced in rural communities.”

While he expects the increased minimum wage to affect businesses’ bottom lines throughout the state, Kuh worries that smaller businesses might not be able to absorb those costs.

“Employers could wind up reducing their employees’ hours, or even eliminating positions, just to keep up,” Kuh said.

Dave Robison, executive director of the Fort Worden Public Development Authority (PDA), reported that the state park maintained between 62 and 64 full-time employee positions throughout 2016, with a peak of 116 seasonal employees in July. Except for two or three high school students employed as seasonal workers, he noted that all were paid above the state’s minimum wage at the time.

“Our internal minimum wage has been $10.50, which we determined was what we needed to attract and retain good staff,” said Robinson, who added that Fort Worden has also offered health benefits for employees working 30 or more hours per week.

As the 2017 Fort Worden budget was being written, Fort Worden was found to have grown “well over 10 percent, mostly in food and beverage service,” according to Robison.

“We’re looking at a new internal minimum wage, because we’re very conscious of wanting to stay above the state minimum wage,” said Robison, even as he expected that many of those raises would be smaller adjustments. “We try to be progressive employers.”

Fortunately, to offset its costs, Fort Worden has projected a modest increase in its overall revenues, with food sales and heads in beds on an overnight basis accounting for large portions of those gains.

To further economize, Robison explained, Fort Worden is set to hire only two new employees, with no increase in the salaries of its leadership teams slated for 2017.

“Because we’re a public entity, any surplus we make is invested right back into the property,” Robison said. “What that means, though, is that we won’t be able to make as many improvements in 2017. All our managers have their own wish lists, but we know we’re going to have to scale them back, because we won’t have as much of a cushion.”

Although Robison describes himself as “totally supportive” of the concerns motivating the new minimum wage, he pointed out that it will be difficult to avoid passing on some of those costs to the customer, especially since the costs of basic food supplies have already been passed onto them.

PRICE HIKES POSSIBLE

Kris Nelson, the owner of three restaurants in Port Townsend, expanded on Robison’s expressed concerns by predicting that all foods produced within the state would go up in price.

“I make an effort to source my meat and vegetables within Washington, preferably from organic farms,” Nelson said. “Between labor and food costs, I’m looking at an across-the-board increase of 15 percent in expenses.”

Even with 18 years of experience as a restaurant owner, Nelson wasn’t too proud to seek out the advice of Seattle restaurateurs who had already gone through this shift.

“I could guess what was coming, so I tried to do my homework beforehand, this past spring and summer,” Nelson said. “I asked for their advice as owners, and I even went to their restaurants as a customer, to see which approaches I did and didn’t like from that end.”

Nelson believes every employee of her restaurants should see at least some benefit from customer gratuities, but she also wants to compensate more skilled employees for shouldering more challenging responsibilities.

While the resultant math is complex, by Nelson’s own admission, what’s she’s determined so far is that she’ll need to raise her prices by 10 percent and cut her labor by 10 percent, to avoid laying off any employees or impacting the quality of service to her customers.

“This means some folks will be working fewer hours, like 38 hours a week instead of 40,” Nelson said. “As the owner, I try to lay myself off first, so I’m giving my staff some of my shifts, especially during the winter. I already increased the prices at Alchemy, and most of our customers haven’t noticed, which is what I want. What we provide has to be worth 10 percent more, even as we’re making 10 percent less off of it.”

Even as Nelson seeks ways to maximize efficiency and eliminate waste, she’s already planning for the implementation of the new minimum wage’s provisions for paid sick leave.

“What I’m hoping is that our customers don’t take off the extra charges from the gratuities,” Nelson said. “If they do, our employees will be worse off than they were before.”

ON THE FARM

Karyn Williams’ celebration of her 10th anniversary as owner of Red Dog Farm in Chimacum this year is being muted by the minimum wage increase that caught her flat-footed.

“When I heard that Seattle had passed their increase, I naively believed it wouldn’t be passed statewide, and even if it was, that there would surely be an agricultural exemption,” Williams said. “Even now, I don’t have any clear answers.”

Williams lamented the loss of opportunities to college students who are looking to contribute to the field of farming without necessarily committing themselves to it as a career.

“We’re not going to be able to hire newbies,” Williams said. “We will need very skilled workers to fill these jobs.”

While Williams credited residents of Jefferson County with caring about the fate of local farming, she wonders if they considered the implications of their votes.

“We’re lucky to have a relatively strong economy in this county, but what about the east side of the state?” Williams asked. “A lot of them are going to lose their farms. It was a mistake to make this minimum wage statewide. Not only is everyone not the same as Seattle, but our farmers are now competing directly with California, which can hire migrant workers for lower wages.”