NW Vietnamese News

The $15 Wage is Here to Stay: How Do Small Business Owners and Minorities Move Forward in Changing Economy?

June 06
02:38 2014

by Don Pham

 

When Vietnamese immigrants first arrived in America, they faced various economic challenges. Language barrier, and a lack of training and resources. Self-taught business owners dealt with this by working harder at lower prices. They focused their attention on industries where labor was cheap, like food and retail, because that’s where they could give customers a better value.

Earlier this week, Seattle’s city council passed the highest minimum wage increase in the country. This will drive up costs in low wage industries, which are the only industries that many immigrants could afford to to enter. According to a University of Washington  study, Asians owners account for 24% of the food market and 19% of the retail market, despite only accounting for 14% of the total population.

For months, small business owners have fought the proposal, insisting that it would drive them out of business. The increase does include a phase-in period for small business owners, to give them more time to adjust. These owners are in a difficult position. Do they leave the city like they said they would, or do look for a new way to survive?

Complaining about the minimum wage isn’t going to change anything. The legislation passed by a 9-0 vote, and is extremely popular among voters. Going backwards is not an option. The only choice is to move forward.

The Seattle economy has changed a lot over the past 30 years, thanks to technology companies like Amazon and Microsoft. By comparison, the immigrant community has mostly stayed the same. Many owners are still uncomfortable about learning new technologies, such as computers and credit card machines. They learned a system that worked when they first came to this country, and they still hold onto it. The same menus, the same look, the same techniques. But now the world is different. What might have worked in the 1980s will not work in the next 10 years.

Business owners will have to make tough decisions on their next move. There are three main options: Raise prices, increase sales, or find new ways to cut costs. It’s going to be difficult, but there’s no other way.

Moving forward means finding ways to use the new economy to your advantage, rather than working against it. Business owners will need to embrace new technology that can save money make their business more efficient, or they can hire employees who can help them get started.

Many businesses complain about a lack of customers. In a recession, wages are low, and customers have less money to spend. A $15 minimum wage drives up the cost of labor, but it also gives customers more spending money.

We should also look into new sources of revenue. Mainstream restaurants make a lot of money their selling alcohol. But most Asian restaurants don’t do this. Even if they include alcohol on the menu, they rarely know how to maximize sales. If they can redesign the menu and retrain their staff, it would make a huge difference. That’s one small change that can help restaurants cover the cost of the $15 wage.

Menus will need to keep up with current times. Customers today are a lot more sophisticated than before. They’re more adventurous in trying new things, and more critical about what they eat. Over the years, I have visited many restaurants with 200 menu items that are the same items as the restaurant next door, and hardly any customers. In those cases, the restaurant would benefit from a shorter menu with more specialty dishes.

In addition to being cheaper and easier to manage, a shorter menu also means fresher ingredients, faster service, and more confidence in the dish. It’s all about quality over quantity. Every restaurant will prepare some dishes better than others, and those are the dishes that the restaurant should focus on.

Some restaurants have non-Vietnamese dishes like Pad Thai to the menu, since it’s a very popular dish for English speaking customers. But very few owners are willing to take a risk, and try something new. Than Brothers is the probably most successful Vietnamese chain in the state, mostly because of a simple cream puff. That’s their specialty, and customers remember them for that. Other Vietnamese restaurants should try to come up with a specialty dish of their own.

I have heard many employers complain that their current workforce isn’t worth $15 per hour. But a higher wage means that employers can seek out a stronger workforce, since skilled workers are more likely to apply. For instance, a waiter who also has bartending experience, or who is good with technology. People who can help the business grow. Current employees will have to either learn new skills, or take on extra responsibility in order to keep their jobs.

Ten years ago, Walmart dominated the market by offering the lowest prices. Today, the company is struggling, and Costco is slowly taking over. Costco pays their employees almost twice as much. But the employees take the job more seriously, and are a lot more productive as a result. As a result, Costco saves money in the long run, and customers appreciate the better service.

A $15 wage will mean a huge change for the Vietnamese community. Owners must a new way to do business. They cannot run things the way they used to. The change from going from the old economy to the new economy is similar to the change of going from Vietnam to America.

But there is also a lot of opportunity to improve, if owners can use this as a chance to find new customers and strengthen their staff. The transition will not be easy, and most owners will not be able to do this on their own. As a community, we need to find a way to pull together, and look for ways to support each other in the upcoming transition. Instead of trying to fight the city council, we should ask the city council for help. We need programs that can help us improve.

I have spoken to several members of the city council who are sympathetic to the challenges that the ethnic community currently faces. They won’t reverse their decision. But they also don’t want to see our community leave town.

The Vietnamese community has worked very hard to get to where it is. But that isn’t enough anymore. Instead, we should be working smarter, not working harder. Instead of cutting costs, we need to increase our value to customers.

Seattle is no longer the same city it was before. We are going to need a plan to get through the next few years ./.

 

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