Tempe coffee shop owners say paying workers more than minimum wage is not hurting business

Arizona’s minimum wage jumps on Jan. 1 from $12.80 an hour to $13.85 an hour.
Published: Dec. 30, 2022 at 5:55 PM MST
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TEMPE, AZ (3TV/CBS 5) - Arizona’s minimum wage is going up by more than a dollar, and that’s raising concerns about how it will impact small businesses.

Owners of Brick Road Coffee in Tempe aren’t worried at all. Nadia Davis is a barista at Brick Road Coffee and says they treat her well and pay her more than minimum wage. “It is a big deal,” said Davis. “I was shocked when they told us they would give us a little increase in pay, because most coffee shops don’t do that, they expect you to live off the tips you make.”

Because Brick Road Coffee is already paying employees $14 an hour, the business will not be affected when Arizona’s minimum wage jumps on Jan. 1 from $12.80 an hour to $13.85 an hour. And they’re not alone.

Valley economist Jim Rounds, with the Rounds Consulting Group, says many businesses are already paying workers above minimum wage because of the current labor shortage, so consumers are already feeling the impact of higher wages in the form of higher prices on goods and services. “It’s impacting retail, its impacting restaurants and bars, so its already being felt,” said Rounds. “Essentially, the minimum wage is just catching up with all the stuff that happened post Covid.”

Jesse Shank and Gabe Hagen are the owners of Brick Road Coffee. They said they’ve been paying workers more than the minimum wage because it’s the right thing to do, especially in today’s economy. It’s also created a better work environment that’s boosted their business. “We get higher quality candidates, higher quality staff. Everything is just a better environment for us making decisions that put people over profits,” said Hagen. “But the profits still come.”

“The cost of bad customer service is infinite,” said Shank. “You don’t get good customer service in an industry like coffee, unless you have happy employees.” “I think our decision to pay them more has made us a more successful business,” said Hagen.