MINNEAPOLIS (WCCO) — The owners of a Minnesota pizza franchise are making an unusual business move this holiday season — raising the pay for all their minimum wage workers to $10 an hour.
The move at Punch Pizza comes as debate is sharpening over whether to raise Minnesota’s minimum wage statewide.
Why is Punch doing this?
The owners of Punch Pizza say it’s a business risk, and they expect a short term financial hit. But in the long run, they say a $10 minimum wage will help them recruit and retain the best employees.
“We want to build something great, and we want to keep it family owned,” said John Puckett, the co-owner of the eight-store franchise.
The pizza company, which specializes in Neapolitan pizzas baked over a wood fire, is raising its starting minimum wage from $7.50 to $10 an hour.
“We feel strongly that by investing in our people, we’ll have better service,” Puckett said. “We’ll have better people. We’ll attract more people to our company, and we’ll be more successful in the long term.”
Puckett is a risk taker, but he’s not naive.
He founded the Minnesota-based Caribou Coffee, selling the hugely successful franchise in 1998 before starting Punch.
And he says he’s not political.
As recent minimum wage protests have sparked controversy around the country, Punch Pizza is above the fray.
The Punch business model is based on the retail chain Costco, and California’s In and Out Burger, which also pay higher wages.
His employees are surprised, and pleased.
By raising the minimum wage, Puckett says Punch will take a short-term hit to its bottom line. But he says the company will still be profitable.
“I’d rather build a great company and be profitable than to maximize profits,” he said.
Minnesota has one of the lowest minimum wages in the country, as low as $6.15 an hour for small employers.
But there will be a big push next year to raise the pay of low wage workers, possibly near the $10 an hour that Punch now pays.
Puckett is not advising other businesses to do what he does, as it might not work for others.