COVID Business: Much-Needed $1/Hour Wage Hike Strains Novato Businesses Struggling To Survive COVID-19

NOVATO (KPIX) -- It has been two years since the City of Novato approved a series of minimum wage hikes and now, despite the economic disaster brought on by the pandemic, businesses will have to pay more to their employees beginning January 1. While there's no doubt workers could use some extra money to make ends meet, it may not be a good time for some businesses to be paying for raises.

The wage hike will be one dollar, with small businesses paying $14 per hour and larger ones, $15 per hour.

"Marin County is probably one of the more expensive counties to live in," said Novato Mayor Pro Tem Pat Eklund. "And it's important for people to work one job rather than two or three jobs in order to pay the rent."

Eklund proposed the accelerated wage schedule last year. After a wage hike in July, the city council considered delaying any future increases during the pandemic, but in a close vote, decided to keep to the accelerated timeline. But this latest hike will actually be the third increase since January of 2020.

Jeff Coplin co-owns Matt and Jeff's Car Wash and Detail Center which employs 60 people for 400 man-hours per day.

"That means these 3 $1/hour increases cost our business about $1,500 a day, more than it would have the year before without these increases," he said.

Coplin says the wage hikes are coming so quickly it's not possible to pass on the cost to consumers and, together with the public health shutdowns, businesses are starting to fail.

Across the street, a deli shut down last month, a Chili's restaurant is closed and the Men's Wearhouse is out of business.

But downtown, Dan Maher owns an essentials store called "Sustainable Exchange." He said he doesn't mind the increase and says vendors need to have a realistic business model.

"It all comes down to how you make your money, how you're spending your money and is your business model sustainable regardless of a buck or two, here?" Maher said.

But he admits he only has one part-time employee. Back at the carwash, Jeff Coplin says he's worked hard to do right by his workers. So far, he hasn't laid anyone off but the wage hike will likely cause a cutback on hours, which means less money in their pockets anyway. He believes this just isn't the time for officials to be generous with someone else's money.

"When you have a city like Novato that's ratcheting up the cost of doing business in the middle of a pandemic on the heels of two months of wildfires, you can appreciate the disconnect between reality and their dreamland, ok?" Coplin said.