Beaver County business raises minimum pay after owner decides that's a sensible move
March 22, 2014 11:51 PM
Georgina Tedrow, loads empty bottles of Nourish Organic onto the line to be filled last year at the Sensible Organics plant in Beaver Falls.
Rob Robillard, president and CEO of Sensible Organics, is bringing all of his employees up to $10.10 an hour. Employees also get a 401(k) match and stock in the private company.
By Ann Belser / Pittsburgh Post-Gazette
By most measures, workers at Sensible Organics were already doing better than their counterparts at other factories in Beaver County.
The lowest paid was making $9.75 an hour, well above the $8 prevailing wage for production workers in the area. Eligible for health benefits the day they walked in the door, the employees also have a 401(k) match of 100 percent for up to 4 percent of their pay, and every employee receives stock options.
But then President Barack Obama talked about a minimum wage of $10.10 an hour during his State of the Union Address in January, and that got Rob Robillard thinking.
Mr. Robillard is the CEO of the company in West Mayfield, next to Beaver Falls. He founded Sensible Organics with his former co-worker at L’Oreal Paris, Nir Liberboim, after they bought a company called Sensible Soaps in 2011.
Its organic skin care products are marketed in Whole Foods and Target under the name Nourish. Sensible Organics is the first company to manufacture skin care products certified organic by the U.S. Department of Agriculture, a designation previously only allowed for food.
Sensible Organics’ factory and offices smell like bergamot, as if one was standing in an Earl Grey teabag. Its 31 employees are split between those on the production side and those in administration.
When the president raised the minimum wage issue, Mr. Robillard began thinking about what it would be like to live on the current minimum wage of $7.25 an hour. “If you work full time, you should be able to live out of poverty,” he said.
His workforce didn’t seem discontent. There has been no employee turnover there for the last eight months.
But Mr. Robillard decided a minimum hourly rate of $10.10 -- a raise of 35 cents an hour for 11 of his workers -- was the right thing to do. He took the idea to his investors at Renewal Funds in Vancouver, British Columbia, in February and they agreed without question.
So what did the workers say when he announced the wage change?
“We said, ‘thank you,’ ” said Karen Blackburn, who has been a production worker there for four years.
“If we could have more employers like that in Pennsylvania, I would be overjoyed,” said state Sen. Christine M. Tartaglione, D-Philadelphia.
Ms. Tartaglione has sponsored a bill to raise Pennsylvania’s minimum wage to $10.10 an hour. In 2006, when the national minimum wage was $5.15 an hour, she sponsored a bill raising Pennsylvania’s to $7.15.
The national minimum wage has since surpassed the state’s -- in 2009 it rose to $7.25, where it has stayed for nearly five years. Minimum wage for workers who earn tips is much lower at $2.82, because the combination of their wages and tips is required to add up to at least $7.25 an hour.
Raising the minimum wage, Ms. Tartaglione said, would help lower the state’s costs of providing public assistance. Many workers are now eligible for assistance because their wages are so low.
Opponents say that raising the minimum wage will hurt small businesses that can’t afford to pay more.
Ms. Tartaglione said that while last year Republicans in the state Legislature lined up against her bill that would have raised the minimum wage to $9, this time more of them are signing on.
The proposed $10.10 minimum wage does not reach the level defined as the “living wage,” the term for the amount a worker would need to provide for basic housing, food, utilities and transportation.
For workers to hit a living wage in Beaver County, according to a calculator from the Massachusetts Institute of Technology, a worker with one child to support would have to make $17.01 an hour.
The trend in Pennsylvania is for employers to cut wages, not raise them as Sensible Organics did.
In a report titled “The State of Working Pennsylvania 2013,” the Keystone Research Center in Harrisburg found wages have been sliding since the end of the Great Recession. The report notes that high unemployment in the wake of the economic downturn erased wage gains made in the early 2000s.
In 2010, right at the end of the recession, median hourly wages in Pennsylvania were $17.48.
The median wage fell by 3 percent by 2013 to $16.95 per hour. The wages are adjusted to 2013 dollars.
A further look by Mark Price, one of the authors of the Keystone report, showed that for the bottom tenth of earners, cuts have been even more drastic. That group has lost 4.4 percent of earnings as average pay has dropped from $8.83 in 2010 to $8.44 in 2013.
“We’ve got to take care of the working people,” Ms. Tartaglione said.
Ann Belser: 412-263-1699 or email@example.com
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