Central Co-op Grocery Store Raises Entry-Level Wage to $15 Per Hour, Seven Years Ahead of Schedule

Central Co-Op

About 100 employees at this grocery store are already earning $15 per hour minimum wages or more, seven years ahead of when Seattle's minimum wage law requires businesses of its size to pay their employees that much.

Under Seattle's landmark minimum wage law passed last spring, businesses with 500 employees or less are not required to pay their employees an hourly wage of $15 until 2021.

But Central Co-op, a not-for-profit grocer on Capitol Hill that's cooperatively owned by about 13,000 members, isn't content to abide by that timeline. The co-op is getting ahead of the game by seven years, entering into a contract with its unionized employees to offer them entry-level wages of $15—starting now.

"We believe working families need that income now," said Dan Arnett, general manager of the cooperative. "We can afford it and find ways to make it work for us. We think our people are worth it."

"We want to inspire change—systematic change," he added. "Particularly in a city that's expensive, we can't fall back on poverty wages."

Central Co-op employs roughly 125 people, about 95 of whom are unionized with either UFCW 21 or the IWW, Arnett said. The company earns an annual net income of about 1 percent, he said, and personnel costs take up about 25 percent of its budget.

I asked him how much this raise will cost to implement. "I don't think of it as a cost because productivity pays the bills, and expenses don't," Arnett said. "I don't think of it that way, because it's all integrated." He said that under the new wage agreement, he expects productivity to grow and forecasts a slight increase in income (sales minus expenses) this year.

Central Co-op

Deli employee Michael McGovern holds up a cup that says, "Good company." "Everyone who comes into the money is going to be making a wage that not only allows them to eat and pay for a roof over their head, but also allows them to enjoy life. I think that’s a huge step for the company, and for Seattle in general," he says.

Michael McGovern, a deli employee at Central Co-op who's a member of UFCW 21, is one of the employees already benefiting from the $15 wage. He said contract negotiations didn't wrap up until last November.

But when it comes to the $15 minimum wage, "from the beginning, that was something that the company and the union agreed on." In fact, he said, it was spelled out in the first draft of the contract.

The co-op's governing Board of Trustees management is expected to sign the contract today. After a sixty-day trial period, new employees will begin earning $15.36 an hour, up one dollar from the trial wage. Wages are tied to annual cost of living increases, and come with a suite of benefits, including full healthcare coverage.

Prior to this agreement, the starting wage at Central Co-op was $12.20 per hour—still significantly higher than Washington's minimum wage of $9.47, as well as the Seattle minimum wage of $10 for companies with 500 employees or less, which doesn't go into effect until April 1.

"It's quite huge for me," said McGovern, who moved here from Orlando about eighteen months ago, and lives on Capitol Hill with his wife. "Now I’m actually able to put money away for… maybe purchasing a home. We’ve talked about having children."

"This is one of the most expensive cities to live," he said. "It’s getting to be like San Francisco. It’s absurd the way things are becoming... I think it was obvious within our company that this needed to happen now."

Throughout the minimum wage debate last year, many business owners expressed fears that a swift wage increase to $15 an hour would drive them out of business, or force them to move out of Seattle.

Arnett, the co-op's general manager, was blunt about the importance of not waiting to boost wages: "I honestly think if you can't find a way to run your business in a way that respects each individual who participates in it, perhaps the market shouldn't tolerate that... I don't believe that exploiting people is ever a good way to build a company. I'm not accusing anyone of that, but I'm also not saying it's not happening, because it is."

The co-op has a history of progressive civic engagement. In September of last year, the company successfully petitioned for a municipal ban on neonicotinoid pesticides, which have been linked to the disappearance of bee colonies.