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Tempe workers see rapid wage hike

 by Grayson Steinberg
 published on Wednesday, November 22, 2006

Corleone’s Philly Steaks manager Keith Durkee raised employee wages in response to the minimum-wage increase, but also raised sandwich prices at the restaurant to compensate. /issues/news/698989
Ryan A. Ruiz / THE STATE PRESS
Corleone’s Philly Steaks manager Keith Durkee raised employee wages in response to the minimum-wage increase, but also raised sandwich prices at the restaurant to compensate.
 

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Cheese steaks at Corleone's Philly Steaks on Mill Avenue will likely be a bit pricier after students return from winter break.

Keith Durkee, the general manager, said the price of sandwiches will have to go up along with his employees' wages.

Durkee raised wages across the board from $7 to $8 an hour after Proposition 202, which raises the state's minimum wage, passed in the Nov. 7 election.

"These guys wanted more money," he said.

Arizona's minimum wage will increase from $5.15 to $6.75 an hour Jan. 1.

Corleone's is among several downtown Tempe restaurants that could feel a financial crunch from the effects of the proposition, said Chris Wilson, vice president of operations for the Downtown Tempe Community.

And while most of downtown's 8,000 workers already make more than $6.75 per hour, some business owners may feel pressure to raise long-standing employees' wages above and beyond the minimum, Wilson said.

Religious studies freshman Leah Faibisoff already got a raise to $7.50 per hour at her job as a chef at Trente-Cinq, a Belgian restaurant in central Phoenix.

She said this has helped pay for gas for her car.

"I drive back and forth [from campus] four to six times a day," Faibisoff said, adding she often goes home between classes.

The new law also benefits workers who receive lower wages because of tips. Now base pay must be no less than $3 below the minimum wage, depending on tips.

Restaurants, especially those that pay servers relying on tips, could get the most immediate wage- hike impact due to their
slim profit margins, Wilson said.

With so many fixed expenses, such as labor and rent, these business owners already have trouble controlling costs, Wilson said.

Guillermo Fernandez, a manager at Slices, said his restaurant wouldn't raise wages because many employees already make $7 per hour and they get a raise every six months that ranges from 50 cents to $1.

"As we make more money, they make more money," Fernandez said.

With employees at many other businesses making more money, sales could increase, he added.

"The poor people are going to have more money," Fernandez said. "They're going to buy more things."

John Wasson, owner of Bison Witches Bar & Deli disagreed, saying price increases of products and services downtown would prevent sales from getting a boost.

"It will help the workers make more money, but it won't increase their buying power," Wasson said.


Reach the reporter at: Grayson.Steinberg@asu.edu.



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