Deli owner Paul Saginaw says paying your employees a wage they can actually live on boosts his bottom line. Recently, he went to the nation’s capital to tell lawmakers exactly that recently.
Saginaw co-owns “Zingerman’s Delicatessen” and hails from Michigan, home to bankrupt Detroit. So, despite the rest of the economy doing pretty poorly around him, Saginaw’s profits are going up.
“We’ve grown since opening Zingerman’s Delicatessen almost 32 years ago to eight businesses in Ann Arbor employing 625 permanent staff with revenues just under $50 million dollars,” Saginaw told U.S. Secretary of Labor Thomas Perez in Washington D.C. “Paying entry wages our employees can live on has contributed to our profitability and our annual compounded growth rate of 10 percent. Raising the minimum wage is long overdue.”
Saginaw pays his employees a starting wage of $21 an hour, offers health and dental benefits to all workers, and offers paid time off, in addition to 401k retirement plans.
Saginaw was accompanied by business owners from several other states who had come to the same conclusions borne of similar experiences.
Paying what Saginaw calls a “thriveable wage” allows his employees to do more than merely survive. Saginaw came up with the idea at a company retreat about a year ago, believing workers to be a part of a bigger economic eco-system. Their mission statement was drafted as a result:
[box type=”shadow]We [are raising] wages to a “thrive-able” level throughout the organization and there is a powerful multiplier effect going on. Higher wages lead to higher morale and is the engine that keeps everything spiraling upward. In many cases, productivity increases due to lowered stress levels in the lives of the people in our organization because of assurance that their financial needs are covered….We have less people needing to rely on forms of public assistance like SNAP card benefits and the Washtenaw Health Plan. We maintain the offering of assistance from our Community Chest because it serves as the safety net for employees without personal networks of support or who face disastrous emergencies outside of their control.[/box]
Secretary Perez agreed.
“What I heard from these men and women who run small businesses is that when you put more money in workers’ pockets, they stay on the job longer which reduces turnover and training costs,” Perez said to the business owners. “Additionally, those workers spend that extra income at local businesses in their communities, which benefits the overall economy. It’s really that simple.”
Saginaw can’t understand why big corporations can’t combine profits with concern for the well-being of their employees. “Maybe there’s limits to generosity but probably no limit to greed,” he told a reporter. “All I know is we created our businesses intentionally based on what we wanted to be, and the life we wanted to live.”