East West announces minimum wage hike
On the ballot
Colorado voters in November will be asked to approve Initiative 101, a measure that would raise the state￢ﾀﾙs minimum wage to $12 per hour by 2020. The current state minimum wage is $8.31 per hour. The federal minimum wage is $7.25.
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EAGLE COUNTY ￢ﾀﾔ East West Partners announced on Wednesday that the company will raise its minimum wage to $15 per hour. The increase applies to the mountain resorts where the company does business.
East West is a real estate development company with sales and property management divisions. The company￢ﾀﾙs current minimum wage is about $12 per hour. The increase will be phased in, with employees at the lowest wage rate receiving an immediate raise of $1.50 per hour, with another $1.50 raise in the summer of 2017.
For those making $12 per hour, the full raise equates to a raise of about $5,000 per year before taxes. The company employs about 1,000 people in the Vail Valley. About 300 of those employees will see the raises.
￢ﾀﾜIt￢ﾀﾙs a big deal for employees who work extremely hard and struggle to live in what￢ﾀﾙs a very expensive place to live,￢ﾀﾝ East West Chairman Harry Frampton said.
￢ﾀﾜWe￢ﾀﾙve been profitable, and not only our stockholders but our employees should share in that,￢ﾀﾝ he added.
But, Frampton said, the company￢ﾀﾙs move wasn￢ﾀﾙt made for entirely altruistic reasons. It￢ﾀﾙs also a smart business decision.
￢ﾀﾜWe know how many employees struggle and have to take second jobs, or have too many jobs in a household to really survive,￢ﾀﾝ Frampton said. Employees who are working too many jobs may not be as effective in their main jobs. More importantly, those people become more likely to leave for other, better-paying jobs.
The 300 people at the low end of East West￢ﾀﾙs wage scale are ￢ﾀﾜintegral to what we do,￢ﾀﾝ Frampton said. Keeping those people is important, especially considering the cost of employee turnover, which Frampton said is ￢ﾀﾜextremely expensive.￢ﾀﾝ
Frampton said East West looked for guidance at the models of two of the country￢ﾀﾙs biggest retailers, Walmart and Costco. Of the two companies, Walmart pays its starting employees less and has higher employer turnover.
Given the size of East West, will the company￢ﾀﾙs move affect wages elsewhere in the valley?
Antlers Vail General Manager Rob LeVine said it might.
￢ﾀﾜIt￢ﾀﾙs pretty likely, I￢ﾀﾙd think,￢ﾀﾝ LeVine said, adding that the move could be good for the valley￢ﾀﾙs economy as a whole.
￢ﾀﾜWhat we see is the people making the least amount of money spend it immediately￢ﾀﾝ when they get a raise, LeVine said. That spending could be for an extra haircut for family members or an occasional dinner out. That money circulates quickly through the rest of the local economy.
Antlers employs about 40 people and has very low turnover, which LeVine said is due to taking an individual approach to employee needs. Some people may need a bit extra in their paychecks, while others stay around for more time off or the company￢ﾀﾙs help with health insurance.
At Vail Resort Rentals, owner Dale Bugby said his staff includes a number of people who have been with the company for 20 years. Pay is a big part of that, he said, adding that his firm￢ﾀﾙs starting wage is about $14 per hour, not including tips and bonuses.
Competing for people
Bugby said East West￢ﾀﾙs move is part of an increasingly competitive labor market and lauded the company for its move.
On the other hand, Bugby said he believes a state ballot measure that would increase the minimum wage across the state to $12 per hour by 2020 is a ￢ﾀﾜhorrible idea.￢ﾀﾝ What works in one part of the state won￢ﾀﾙt work in another, he said.
East West has a similar view, since only workers in the company￢ﾀﾙs mountain resort markets ￢ﾀﾔ the Vail Valley, Lake Tahoe and Park City ￢ﾀﾔ will see the wage shift. The company won￢ﾀﾙt raise wages to that level in its Denver operations.
Whether or not East West￢ﾀﾙs move causes upward pressure on wages will take months to determine.
Ryan Gedney, an economist with the Colorado Department of Labor and Employment, said there￢ﾀﾙs currently a shift toward higher wages around the state and country. On the other hand, Gedney said, it￢ﾀﾙs unclear whether smaller employers will be able to match East West￢ﾀﾙs move.
￢ﾀﾜIn the short term, there will be (employers) who say it￢ﾀﾙs tougher (on) me,￢ﾀﾝ LeVine said. ￢ﾀﾜI￢ﾀﾙm a little sympathetic to that, but I try to look at the bigger picture. Maybe (employees) will decide they can stay in Vail. That can lead to better customer service and a better customer experience.￢ﾀﾝ
To do that will take more than just pay, Frampton said.
￢ﾀﾜWhether a company is a preferred employer depends on a lot of things ￢ﾀﾔ this is just one arrow in the quiver.￢ﾀﾝ