The Park Rapids City Council will pay all Rapids Spirits Liquor Store employees a $2 per hour “COVID-19 differential” through Dec. 31.
City Administrator Ryan Mathisrud made a case for the pay differential, complete with a memorandum of understanding with UFCW Union Local 1189, at a special meeting Tuesday via conference call.
During the COVID-19 pandemic, Mathisrud said, the store’s sales have gone up more than 20 percent – while struggling to staff its summer part-time clerk positions. This has resulted in a lot of overtime pay, mainly for the manager and lead clerk.
He said the staff was starting to get tired.
Contributing to the challenge of finding workers, Mathisrud noted, is the fact that other local retailers are offering $13 or more per hour in starting wages. Walmart, for example, is currently starting new employees at $13 per hour with a $2 summer differential.
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Meanwhile, the liquor store currently starts employees at $11.86. The proposed $2 COVID-19 differential would put new hires at $13.86 per hour and benefit other employees across the board.
Saying he hoped this incentive would make the liquor store more competitive in the job market, Mathisrud projected it would increase the store’s wage costs by $17,000. However, with revenues up, he said the store should remain profitable.
He also recommended authorizing city staff to post the part-time positions as “open until filled” in order to speed up the hiring process.
Council member Tom Conway questioned whether the additional $2 will be enough to secure new hires, or will merely raise the cost of the existing staff without benefiting the city. “I’m not convinced it’s going to work,” he said.
“It’s our hope that by being competitive, we will get additional applications for the positions we have open,” Mathisrud said. “I guess we don’t know yet. We know we need to get to be more competitive with the wages, in order to get more applications right now.”
Council member Liz Stone suggested making it $3 per hour to “even the playing field” with Walmart, and possibly ending it Sept. 1 or Oct. 1 instead of Dec. 31.
Council member Erika Randall voiced skepticism about using economic forecasts for the COVID-19 pandemic to budget beyond Sept. 1. “I’m not saying that I’m opposed to applying $3,” she said. “I’m just not confident about the budget, that we’re going to fulfill our profit at the end of this (year) if we go $3.”
Mayor Ryan Leckner agreed, recalling that the city’s finance committee went through a lot of information to justify the $2 differential and did not look at $3.
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“Maybe we can do the $2 for now and … make a decision later on, and get some more information on if we need to go up,” he said.
During further discussion, Randall noted that Walmart’s $13 starting wage includes the $2 summer differential. Also, Conway pointed out that the CARES Act incentives for unemployment are due to expire in mid-July.
Conway moved to approve the pay differential as presented. The motion passed 4-1, with Stone opposed.
