Refrigeration Magazine - February 2017

FEBRUARY 2017

Keeping Your Employees

TENNESSEE VALLEY ICE SETS GREAT EXAMPLE

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7 February 2017 Vol. 200 │ No. 2 ISSN #0034-3137

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EDITORIAL STAFF Editor/Publisher Mary Y. Cronley refrigerationmag@gmail.com (404) 819-5446 Senior Staff Writer Joe Cronley cronley.joe@gmail.com (404) 295-5712 Art Direction Markurious Marketing info@markurious.com (678) 439-6534

FEATURES

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Established as ICE in 1906, Refrigeration Magazine™ is published thirteen times a year, including the Annual Buyer's Guide.

Postmaster: Send notice by form 3579 to: Refrigeration Magazine 260 Lakeview Ridge East Roswell, GA 30076 Annual Subscriptions: US: $49/year or $79/two years International: $79/year

7 Ice Alaska Fire Destroys; Community Rebuilds 9 Mastro Ice House Warms the Community

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EMPLOYEE RETENTION

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FAMILY BUSINESS

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ASSOCIATION NEWS

ADVERTISING, SUBSCRIPTIONS, ACCOUNTS Mary Y. Cronley Editor/Publisher refrigerationmag@gmail.com (404) 819-5446

OUTREACH

10 How Much Do Ice Road Truckers Make?

12 How Can You Keep Your Good Truck Drivers?

19 California Unprecedented Minimum Wage Increase Will Hurt Vulnerable Works 23 Should You Raise Your Employees' Pay?

Tennessee Valley Ice Company: Three Generations Four Locations. Serving a Growing Region

A Note from Tony Dickson, GLIA Vice President

DEPARTMENTS

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Keeping Our Heads Straight Despite the Politics

24 CALENDAR

Upcoming industry events

26 AD INDEX

A list of our advertisers

26 CLASSIFIED ADS

Classified advertisements by region

Single Copies: $6/copy

Copyright © 2017 by REFRIGERATION Magazine™. All rights reserved.

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February 2017 │ REFRIGERATION Magazine 3

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Keeping Our Heads Straight Despite the Politics The daffodils will be poking through the snow any day now. It doesn’t matter what the groundhog did, no matter where you are, spring is going to come. And you’re going to be ready.

It could be easy to get lost in the incessant daily news of change in our country and throughout the world. Yet you managed to get up this morning, get out of bed and read something. Even if you’re in a part of the country that’s still snowed under, you are probably still shipping product, maybe even producing at a low level. Your plans for the season should be finalized and underway.

It’s actually not too late, provided you don’t want to make major plant changes. It’s not too late to make changes in procedures, route planning or billing software, or possibly relationships with your accounts. It’s not too late to analyze last year’s accounts with a fine toothed comb and decide whether you have customers who are not worth it. There are probably a few that you actually lose money on every time you drive to their location.

It’s a great time to be interviewing new drivers. If you hire college kids, now is the time to create a social media strategy to reach and attract them. I have teenage kids, and I am saddened that this is one of the only ways to get their attention. Email is so 2000.

And speaking of social media, this is a great time to really consider whether you need a social media strategy. Facebook and Instagram are probably not effective ways to reach a grocery store buyer, but it sure is good to make sure spring break partiers know where your ice is sold. Get your kids involved. It will help them understand the family business and make them feel valued. Win - win.

You know your community better than almost anyone. You know when the spring and summer festivals happen and where the popular places for major holidays will be. You know when opening day for your sports teams are, the last day of classes at the local college, and opening day of fishing season. Plan now for stocking up for these times.

If you think about it now, if you plan for it now, you can make sure you’re never caught short. Reserve a rental truck for Memorial Day, Independence Day, those days you’ll need to support the local arts or music festival. Use that social media to line up temporary help for rush times so you don’t have to pay a premium to a staffing firm. Leverage colleges, your kid’s fraternity or sorority, any kind of affinity groups with word of mouth. Pay them well.

If you take care of this stuff now, you’ll have your head on straight when things really start buzzing. You’ll be able to put out the fires when they pop up (and they will) without distraction from the day to day.

If you do this right today, next October or November you can be looking back at a great season rather than still working to fix problems from August.

Joe Cronley SENIOR STAFF WRITER

cronley.joe@gmail.com 4 REFRIGERATION Magazine │February 2017

"It’s not too late to make changes in procedures, in route planning or billing software, in relationships with your accounts.

It’s not too late to analyze your last year’s accounts with a fine toothed comb and decide whether you have customers who are not worth it.."

February 2017 │ REFRIGERATION Magazine 5

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FAMILY BUSINESS OUTREACH

Ice Alaska Fire Destroys

COMMUNITY REBUILDS Concession stand and administrative offices at Ice Alaska lay in a pile of rubble, but carving has started at the Kids Park and officials say they plan to open the Ice Park on Feb. 20.

A fire may have destroyed the park’s main offices, but Ice Alaska is moving forward with its annual international ice carving competition, which is going into its 27th year. “The ice didn’t burn up,” said Hank Bartos, the retired U.S. Air Force lieutenant colonel who leads Ice Alaska’s board of directors.

Ice carving competitors have registered for all but three of the 70 sculpting sites for the BP World Ice Art Championships, Bartos said.

The phones and internet at the Ice Park are back on, and plans are laid for a tent camp to be installed next month.

Ice Alaska is partnering with Arctic Man Ski and Sno-go Classic, which is providing tents and other equipment for a modest fee.

“They are helping us because they don’t want to see our event diminished,” Bartos said. “If the tables were turned, we would do the same for them.”

A fund drive on the website GoFundMe has raised $2,400 of the $50,000 goal. Bartos said all of that money will go toward cash prizes and medals for the dozens of ice carvers who will be wielding chisels and chain saws at the Ice Park in a few short weeks. “Any money donated to Ice Alaska goes to support the event,” Bartos said.

Ice blocks are being harvested from O’Grady Pond, and volunteers have met regularly. According to the preliminary investigation, the fire was caused by a problem with the heating system, the city fire marshal said.

The building was insured for $1.5 million, which is a fraction of the value of the loss, Bartos said. The insurance company has yet to pay on the loss. Bartos said that could take years.

Ice Alaska has had to replace the video cameras that broadcast the competition to the world through www.icealaska.com. “It’s going to be even more high tech than what we had because it’s all newer stuff,” Bartos said.

The warm-up hut and concessions space will be smaller this year.

“It’s going to be a heated tent type of operation,” Bartos said.

The entry fee to play with and look at ice sculptures by worldclass artists will remain the same this year, $15 for adults and $8 for youths, Bartos said. “The ice artists and the quality of sculptures and everything else is going to be as good or better than ever,” Bartos said.

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Ice Alaska is also remodeling an unfinished building and asking for donations of money, skilled labor, furniture and food. “Right now, what we are doing is kind of cobbling stuff together,” Bartos said.

“We need help.” They need tables, chairs, video monitors and nonperishable food, he said. “We have to feed these artists,” he said. “It costs a lot of money.”

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Aaron Costic, Elegant Ice, Broadview Heights, Ohio, has been keeping us posted on the devastating fire in Alaska, which destroyed the ice carving park. Along with the other means of support in helping to assist in the rebuilding of the park, Aaron took his part seriously.

Below is a letter from his website: If you are anything like me, finding out about the fire in Ice Park breaks your heart. I came up with a plan that might help.

This year we will not be bringing tools to Alaska for sale. You will still be able to order bits & tools from us in advance. I will be happy to bring them up to you. To help Ice Alaska out we will donate 10% of the revenue from bit sales between now and Feb 15.

HOW IT WORKS – Call Ali (or email, or order online) with an order for ice carving bits between now and February 15th.

– She can either ship them directly to you, or I can bring them up to Alaska with me.

– We will donate 10% of the bit orders to Ice Alaska to help rebuild.

Please share this with your (ice carving competition) teammates.

February 2017 │ REFRIGERATION Magazine 7

8 REFRIGERATION Magazine │February 2017

OUTREACH

MASTRO ICE HOUSE

Warms THE COMMUNITY Mike Mastro, Mastro Gourmet Quality Ice, Pittsburgh, Pa., has been busy building a house in January. He shared his mini-mansion with Refrigeration Magazine, as he teamed up with the Dollar Energy Fund. The 1000 sq. ft. house is made out of over 250 blocks of ice. It contains 52 logos, a full kitchen, bath, living room and a one car garage! It was designed and built entirely by the Mastro Ice Team over a two-day period.

Dollar Energy Fund's "Cool Down For Warmth" takes place every January to raise awareness and funds for hardship cases involving utility assistance to qualifying individuals. Mastro has worked with Dollar Energy for three years on this project along with the major utility suppliers (sponsors) in the Pittsburgh area to help provide help to thousands of families. The two-day event includes local businesses and groups pledging to sit in the Ice House for certain periods of time until they raise money to "get out." There is also live radio broadcasts, visits from local dignitaries, a soup cook off and a raffle to win a "Golden Ticket" – two season tickets to the Pittsburgh Penguins for 20 years!

“Our hope is that the Cool Down for Warmth draws attention to the thousands of families in our region who are at risk of losing their heat-related utility services during these cold months,” said Chad Quinn, Chief Executive Officer of Dollar Energy Fund. “No one should have to face a Pittsburgh winter without utility service, so we are focusing our efforts through this event to raise funds and awareness to help ensure that more families can afford to heat their homes when the outside temperatures drop.”

All donations received a dollar-for-dollar match from Dollar Energy Fund’s partnering utility companies and 100% of the donations and matching funds will be used to provide utility assistance grants to local families in need through the Hardship Program.

Dollar Energy Fund’s Hardship Program provides one-time assistance to eligible, limited-income households facing an immediate utility crisis. With help from the program, families in need can receive up to $500 in grant funding that is applied directly to their utility account to prevent a termination or restore their service. More than 12,500 households in Pennsylvania receive assistance through Dollar Energy Fund’s program annually.

For more information about Dollar Energy Fund and how to apply for a grant from the Hardship Program or donate to the organization, visit www.dollarenergyfund.org.

February 2017 │ REFRIGERATION Magazine 9

O D H C U HOW M

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Driving a truck full of ice isn’t the same as this article.

You’re in a seasonal business, and maybe some of your drivers are on furlough through the winter. It looks glamorous on TV, but then again the Dirty Jobs guy can make those look glamorous. Here’s a realistic look at a branch of trucking that hardly anybody heard of a few years ago.

ntil the famous Ice Road Truckers TV series, most people had never heard of ice road trucking – unless they were in the trucking business themselves. A highly dangerous job, ice road truckers get paid some of the highest salaries in the business. With great risk comes great reward, but how much can you really expect to earn? First, let’s discuss what makes this job so dangerous, and then talk salary numbers.

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FAMILY BUSINESS EMPLOYEE RETENTION Why is Ice Road Trucking So Dangerous?

The job title says it all. Ice road truckers have to deal with freezing weather and snowstorms – both of which make road travel significantly more dangerous.

Some drivers report being able to hear the ice cracking as they drive over it.

The weather in Northern Canada can be brutal during the winter. It’s not uncommon for temperatures to drop to -45 F without wind-chill. With windchill factored in, temperatures can feel closer to -95F. When temperatures drop this low, mechanical issues are a major threat, and road conditions can be especially dangerous. On top of all that, the drivers themselves face the very real threat of hypothermia.

Did we forget to mention that ice roads really aren’t roads at all? These truckers actually drive over frozen lakes, ponds, rivers and swamps to reach the Northern corners of Alaska and Canada.

To get out alive, ice road truckers must always be on the move. The ice can hold the weight of a 100,000 pound truck – when it’s moving. If the truck comes to a standstill, the ice can only hold about 60,000 pounds of weight before it caves.

Stopping is not an option and can spell disaster for everyone and everything in the truck.

Truckers face: – White outs – Ice road fractures

– Accidents – Avalanches

Ice road trucking is not for everyone. The pay is fantastic, but it’s in line with the risks you’re taking each season.

Ice Road Truckers Pay Scale Ice road trucking is one of the best paying jobs in the trucking industry. On average, ice road truckers are paid between $20,000 and $80,000 for the season.

The length of the season will vary depending on the climate. Northern climates can be temperamental, so the season is usually in line with whatever Mother Nature has planned.

Typically, the season starts in the middle of January and will run to the middle of March. Some seasons can be as short as six weeks, while others can last several months.

Keep in mind that the salary listed is for just six weeks to two months of work.

Needless to say, ice road truckers are paid very well.

Job Availability Ice road trucking jobs aren’t as readily available as your typical over-theroad trucking job. You won’t find these opportunities through conventional companies. You’ll need to travel to Canada or Alaska to find these opportunities, and they’re scarce. Why? Because the pay is so high.

It’s not easy to land a job as an ice road trucker. The top trucking companies are looking for drivers with years of experience. Recent graduates from truck driving schools won’t even be considered. To succeed at such a dangerous job, you need to know the ins and outs of trucking, and rookies just don’t have the experience needed for a risky job like this.

The ice road trucking community is tight-knit, which can make it hard for newcomers to break into the business. If you don’t know someone in the industry or aren’t referred by someone, your application will probably be tossed aside. It’s an unfair practice, but very much a reality in this dangerous business.

Why Are Ice Road Truckers Paid More?

Ice road truckers are paid more for one simple reason: the job requires more skill and conditions are dangerous. It also costs considerably more to outfit a truck for driving in such extreme weather conditions.

It takes about $10,000 to outfit a truck for ice road conditions. Special cab and engine heaters are required to handle the freezing temperatures. Satellite phones and first aid equipment add to expenses as well as fuel additives that prevent freezing.

When temperatures get as cold as they do in the north, nearly every part of the truck is subject to failure from the rims to the truck frame itself.

Ice roads are long and lonely with few opportunities to make stops. Drivers must bring extra food, water, supplies and parts to get through each trip.

Even something as simple as changing fuel filters or adding fuel gels can be dangerous to drivers as the frigid temperatures are life-threatening.

While the pay is great, most truckers don’t return to the job the next season.

Ice road trucking has a 70% turnover rate because conditions are so dangerous, and the job can be very stressful at times.

Many drivers quit after their first trip.

Dangers aside, most truckers will never travel at speeds greater than 15 mph, which can make for long and dreary days. With no cell reception in the area, drivers are also very isolated.

The Reward is Worth the Risk If you haven’t been scared off by the dangers and risks of the job, the reward is worth the risk in this field. Ice road truckers can earn an entire year’s salary for just two months of driving. The high salary is certainly an attractive factor, but it’s important to seriously consider the risks associated with this job.

You need to have a survivalist attitude, experience and exceptional skill to get through the season alive. And with every trip you take, you put your life on the line. But if you have the skills and guts, ice road trucking may be the right choice for you.

February 2017 │ REFRIGERATION Magazine 11

How can you keep your good truck drivers?

T

Reprinted from Telogis online driver site. Telogis is a subsidiary of Verizon.

Trucking companies continue to experience a lack of available qualified drivers while cargo volumes increase. The industry demand is putting the squeeze on long haul operators who are resorting to paying top dollar or recruiting inexperienced drivers, both of which are not ideal solutions to the problem.

Maybe the best question is not ‘how can we find more drivers?’ but ‘why can’t we retain the good ones we have?’ This makes perfect sense when you read that recruitment and training costs for each new driver is estimated at around $5,000, and the chances of being involved in an accident are considerably higher as workers ‘learn the ropes’ in their new position.

So how do you retain your good drivers?

Step 1: Identify your good drivers Like a prospector sifting through dirt to find gold, you need to know which of your drivers you should be focused on keeping. You can’t do that if you haven’t been keeping accurate records or know each of your drivers intimately. Most long haul or OTR trucking companies have hundreds of drivers, so it’s unlikely you’ll have the bandwidth to monitor all of them manually. That’s where

12 REFRIGERATION Magazine │February 2017

fleet management systems can help automate some of your job as a fleet manager.

To find out those specifics you may need to do some primary research and actually talk one-on-one with your staff.

You can set up automated, regular reports on driver activity with your fleet tracking system and have them emailed directly to your smartphone for easy reference. Driver scorecards and trend dashboards also paint a good overall picture of your employee performance. You’ll soon gain a good understanding of which drivers are pulling their weight and which aren’t.

Different drivers generally want different things, and by taking the time to sit down and discuss these things with them will not only provide you with valuable insight into what motivates your drivers, but also help your staff to see that you value them and see them as a key part of the business.

Finding those ‘gold nugget’ drivers is important — not just for your business, but also for your drivers. They need to know if they are under-performing since it affects both their career prospects and pay scale.

Once you’ve identified your best drivers, you can find out what they want from you as an employer and what it will take to keep them in the fold.

Step 2: Find out what your drivers want While there are many benefits that are universally desired by drivers (good pay, reliable equipment and sufficient rest and time at home), there are those individual things that might appeal to each worker.

You may not be able to deliver everything they ask for, but it will help you to see what motivates your drivers, and their answers may surprise you.

Step 3: Decide how you can improve working conditions Now that you have a knowledge of both your good drivers and some insight into what they want out of their job, it’s time to take action. This will vary depending on what responses you got from your drivers, but here are some common outcomes from other trucking companies with potential solutions to aid driver retention.

• O ffer a competitive pay scale — While this isn’t surprising, it can be a sore point for fleet owners hit by

FAMILY BUSINESS EMPLOYEE RETENTION a down economy and aggressive competition. The good news is that, while it’s a big motivator for a lot of drivers, it’s not everything. If you can offer other benefits (see Unique features below) then that may swing the vote in your favor, even if you can’t offer top dollar.

• K eep your equipment in good working order — No driver enjoys nursing an 18-wheeler from one state to the next, never knowing what will go wrong next.

Keeping your fleet well-maintained is a must. It’s also important that your drivers have confidence in your navigation software — it’s not good for you or the driver to be picking up infringements for driving illegal routes.

rest. Google offers free gourmet meals, Burton Snowboards gives staff free season passes, and now you can do something different for your staff. Telogis Navigation gives drivers the unique advantage of a commercial navigation system that is supported by feedback from over 140,000 other commercial road users. The Telogis Fuel Module equips your drivers with a flexible fuel card that is accepted in

over 160,000 locations. Little things can add up to improving your employees’ overall experience.

If you’d like any help getting your long haul trucking firm improving driver retention, get in touch with a Telogis consultant who can demonstrate how having the best systems is the key to keeping the best drivers.

• M ore work/life balance — Long haul driving is more than a job; it’s a lifestyle.

Sometimes it can be difficult competing against local transport operators who offer their drivers more time at home than their OTR counterparts. Of course, that’s the same reason some drivers are drawn to it — find those who love the freedom and adventure of long haul and hang on to them. It can also help if you have smart route planning software that can help automate the scheduling of drivers to maximize time with their loved ones.

• U nique features — It always helps if you have a unique selling point, something that makes your firm stand out as different and more attractive than the

February 2017 │ REFRIGERATION Magazine 13

3

generations

4locations

SERVING A GROWING REGION ho says a family owned company in a medium sized market can’t compete with bigger players?

Gary Bloodworth, his daughter Jessica and son-inlaw Ryan Doolittle are second and third generation living proof that good practices and knowing your market can keep you competitive no matter who else is in town.

Gary’s parents H.L. and Betty bought a small plant in Chattanooga, Tennessee in 1973 – 10 tons of Vogt production. Gary has company records that record their power bill at $600 per month in peak season, and their one employee was paid $200 per week. That Vogt plant cranked out 600 packages a day.

A couple years later, his dad doubled capacity, adding 10 tons of Turbo production. Over the intervening years the company has continued to grow, consolidating to an all Turbo production line now at 200 tons - over 35,000 packages a day, with a fully automated packaging line.

Gary spent his high school years at the plant, starting on the bagging line. He’s done every job there is at the plant including running a route, and he’s now Vice President of the operation and Plant Manager.

Tennessee Valley Ice now services multiple markets, with distribution points in two other Tennessee markets: Crossville, near the Knoxville market, and Nashville. They also cross the Appalachian Mountains to a distribution point in Murphy, N.C., in the mountainous region that is close to many of that state’s lake and second home communities.

14 REFRIGERATION Magazine │February 2017

The company has centralized its production with a plant that’s really in the Tennessee Valley, within sight of the river that winds through Chattanooga, and has fully automated its production line. They have a full fleet of trucks including over the road haulers for their distribution points, and of course their drivers cross state lines, requiring a DOT compliant rig.

FAMILY BUSINESS

,,

In 1973 company records show their power bill at $600 per month in peak season, and their one employee was paid $200 per week. That Vogt plant cranked out 600 packages a day.

Gary has been joined by daughter Jessica, and together with her husband Ryan Doolittle they are the third generation family team. Chattanooga isn’t one of the country’s major markets, but it’s a bustling city. With three other locations, the team is kept plenty busy.

Gary points out that Chattanooga was the first location to host the Southern Ice Exchange, the world’s oldest ice production trade association.

While the group was founded well before any of the Bloodworths were even born, he’s proud that his parents were present at the group’s centennial meeting in 1989, once again hosted in Chattanooga.

Clockwise from top: Tennessee Ice Valley Company plant; Judy Bloodworth, Gary Bloodworth, Jessica Doolittle and Ryan Doolittle pose in front of a company truck; Jessica Doolittle; Terry McNabb, in the bagging room.

February 2017 │ REFRIGERATION Magazine 15

800.325.3667

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18 REFRIGERATION Magazine │February 2017

314.849.4411

|

www.automaticice.com

EMPLOYEE RETENTION

California's Unprecedented Minimum Wage Increase Will Hurt Vulnerable Workers

This increase has no historical precedent.

Chart 1 shows real U.S. minimum wages since 1979. It displays the federal minimum wage (which applies to all states), the highest minimum wage in any state that year, and California’s minimum wage.

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Adjusting for expected inflation, $15 an hour in 2023 will be worth $13.39 in 2016 dollars. That is over one-third higher than the next highest state minimum wage ever. No state in U.S. history has had an inflation-adjusted minimum wage that approaches this level.

By James Sherk, Research Fellow, Labor Economics Center for Data Analysis Heritage Foundation

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Events of the past November have ended any discussions about a substantial national minimum wage increase. Since then, though, states in opposition to the current administration have declared their intent to “go it alone” with their own plans for economic and social proposals. The most notable and vocal of these states is California, which has a significant number of packaged ice plants. This measure should have a significant effect on them.

The California legislature has passed an unprecedented statewide minimum wage hike. By 2023, the minimum wage across California will be $15 an hour.

Adjusted for inflation, this will be higher than any statewide minimum wage in U.S. history. It will also be higher than the national minimum wage of any country in the world. The real increase will be even greater in inland and rural areas that have lower costs of living. When fully implemented, this law will cover one-third of all employees in California.

The wage mandate will make it very difficult for many Californians to find work.

Businesses will respond by cutting jobs, raising prices, investing more heavily in labor-saving technology, or leaving the state. All of these responses costs jobs.

Overall, the mandate is projected to reduce the employment of affected workers by one-fifth and eliminate approximately 900,000 full-time-equivalent (FTE) jobs by 2023.

Historically Unprecedented Minimum Wage Increase

In real dollars, California currently has the highest statewide minimum wage in U.S. history. In January 2016, California’s minimum wage increased from $9 an hour to $10 an hour. Adjusted for inflation, neither the federal government nor any state has ever had a higher minimum wage than this. In the first quarter of 2016, the minimum wage covered over onesixth of California’s workers California’s minimum wage will soon rise even higher. The California legislature recently increased the state’s minimum wage to $15 an hour over six years.

The minimum rose to $10.50 an hour in 2017 and $11 an hour in 2018, and it will increase by another $1 an hour in each subsequent year until it reaches $15 in 2022. Businesses with fewer than 25 workers will have until 2023 to reach $15.

For future years, the legislature indexed the minimum wage for inflation.

Directly Affects One-Third of Employees

One-third of California’s wage and salary employees make less than this new minimum wage. Such expansive coverage also lacks historical precedent.

Chart 2 displays the proportion of workers covered by the minimum wage by state and year, along with average coverage across the U.S. In the late 1970s and early 1980s, the federal minimum wage covered as many as one in five workers in some southern states (Mississippi, Arkansas, and Alabama) with low costs of living. But the minimum wage has never covered one-third of a state’s workforce. Whether expressed in real dollars or as a proportion of workers covered, no state has increased its minimum wage as much as California’s legislature recently did.

Larger Impact in Areas with Lower Living Costs

The $15 mandate will have a greater effect outside California’s major coastal cities. Employers in high-cost areas must

February 2017 │ REFRIGERATION Magazine 19

an hour in 2016 dollars.

Relative to average U.S. living costs that figure is only $11.92—a consequence of California’s higher living costs. Within California, however, the real minimum wage will vary from a low of $11.04 an hour in San Jose and Silicon Valley to a high of $14.69 an hour in El Centro and Imperial County. The wage mandate will have a much greater effect on California’s less-developed regions than on its prosperous cities.

Highest Minimum Wage in the World

pay higher wages to attract and retain their workforce. The California legislature, however, imposed the same minimum wage statewide. Thus, employers in Fresno will pay as much as employers in Los Angeles. As a result, the mandate will impose higher real minimum wages in rural and inland California than in California’s major cities.

Some areas of California, especially San Francisco and the Silicon Valley, have well above-average living costs. Other regions, such as the Sacramento metropolitan area, have living costs close to the U.S. average. More rural regions, like the El Centro metropolitan area (Imperial County), have below-average living costs.

Map 1 shows the real minimum wage in 2023 across California’s metropolitan areas. The map shows the minimum wage adjusted for inflation (in estimated 2016 dollars) and also adjusts for the difference between local and average U.S. living costs.

Accounting only for inflation, California’s minimum wage in 2023 will stand at $13.39 20 REFRIGERATION Magazine │February 2017

Once the legislation is fully phased in, California will have the highest real statewide or nationwide minimum wage in the world. Table 1 shows living-cost-adjusted minimum wages in California and other major developed countries.

Luxembourg currently has the highest nationwide global minimum wage at $11.46 an hour, after adjusting for differences in purchasing power across countries. Australia has the next highest minimum at $11.15 an hour, followed closely by France at $11.11 an hour.

California’s high-cost coastal cities will have real minimum wages in this range.

Real minimum wages across the rest of California will be much higher. In cities like Sacramento, which has a living cost near the U.S. average, the real minimum wage will rise one-sixth higher than the French and Australian levels. In rural regions like California’s Kings County (the HanfordCorcoran MSA), the real minimum wage will stand about a quarter higher than the next highest state or nationwide minimum wage in the world.

Hurting Less-Skilled Workers

This unprecedented increase will hurt many workers. Companies hire workers

when the additional earnings their labor creates exceeds the cost of employing them. Many California workers produce less than $15 an hour in value. The California legislature has effectively made it illegal for these Californians to work; few businesses will hire employees at a loss.

Moreover, the legislature did not establish a lower minimum wage for youth; the wage mandate covers everyone irrespective of age. This will make it particularly difficult for younger workers to find entry-level jobs. Most teenagers lack the skills necessary to produce $15 an hour in additional earnings for an employer.

The nations with globally high minimum wages recognize this problem. They all exempt younger and less-skilled workers to some degree. Australia, for example, sets its minimum wage for workers under

EMPLOYEE RETENTION 21 as a percentage of the adult rate. For Australian 16-year-olds that percentage is 47.3 percent—$5.27 an hour in purchasingpower-parity-adjusted U.S. dollars.

is highly subjective. Wages will almost certainly increase more than the minimum necessary to comply with the law, but it is difficult to predict by how much.

increased their prices—some as much as 20 percent. Higher prices reduce consumer demand and consequently the number of employees.

By eschewing youth rates, California will make it very difficult for younger workers to get started in the labor market. The wage mandate means most California firms cannot profitably employ them.

Employer Adjustments

Businesses that compete in national or international markets (manufacturing firms, for example) have little room to raise prices. Their competitors outside California will not do the same. Many of these companies will relocate to another state or country. This outmigration has already begun. American Apparel recently laid off 500 of its workers in Los Angeles and announced plans to move its L.A. operations out of California.

Substantial Pay Increases Necessary to Comply

Employers will have to raise affected workers’ wages by an average of 28.3 percent to comply with the new mandate. Additional raises are likely for workers making near $15 an hour.

Employers want to reward more productive workers with pay that is above entry-level rates. For example, roughly a quarter of first-line supervisors of retail workers in Fresno make less than $15 an hour in 2023 dollars. Paying these managers the same as newly hired employees they supervise would eliminate the incentive to work harder to earn a promotion. Quantifying the magnitude of these “spillover” effects, however,

Firms will respond to the requirement to pay higher wages in four main ways: 1) Cutting jobs and hours; 2) Raising prices; 3) Investing in labor-saving technology, or 4) Moving.

Most companies affected by the new legislation will respond by eliminating positions and cutting employee hours.

The legislature has made labor more expensive and consequently employers will use less of it. For example, the Holiday Inn Los Angeles Gateway laid off seven of its employees in response to the first phase of Los Angeles’s minimum wage hike.

Some companies, such as restaurants, compete only in California. These companies will also respond by raising prices—knowing that their competitors must also raise prices. When Oakland increased its municipal minimum wage to $12.25 an hour, many local restaurants

Many companies will try to hold down labor costs by investing in laborsaving technology. As a result, many human jobs will be automated more quickly than would otherwise occur.

Ed Rensi, former president and CEO of McDonald’s USA, recently said he expects this mandate to cause most fast-food restaurants in California to replace their human cashiers with kiosks.

Some companies will find such adjustments do not cover their higher

February 2017 │ REFRIGERATION Magazine 21

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22 REFRIGERATION Magazine │February 2017

EMPLOYEE RETENTION costs. These firms will go out of business entirely. This happened to Mokka, a Berkeley coffee shop. The city raised its local minimum wage to $12.53 an hour. Mokka tried to respond by raising prices and introducing new menu items. The higher prices drove away customers, however, leaving total sales unchanged. Unable to absorb the higher wage costs, Mokka recently announced plans to close. All these reactions will eliminate jobs.

Total Job Losses

Studies of previous minimum wage increases shed little light on how many jobs will be lost. Those studies examined much smaller minimum wage increases that affected relatively few workers. Economists have extensively studied how businesses respond to higher wages overall, not just minimum wage increases.

On average those studies find a 10 percent increase in labor costs causes firms to reduce employment of less-skilled workers by 6.8 percent in the long run. This is not a precise estimate—some studies find greater job losses, others find lower. This average does indicate, however, the approximate magnitude of job losses that occur when labor costs rise.

Applied to California, these studies imply the $15 mandate will reduce employment of affected workers by approximately 19 percent. That represents job losses on the order of 900,000 fewer FTE jobs in California by 2023. The wage mandate will eliminate roughly one in five California jobs that pay below $15 an hour.

Conclusion

California’s minimum wage increase is historically and globally unprecedented. By 2023, California will have a higher minimum wage than any state has ever passed. It will also be higher than any other developed nation’s minimum wage. The real increase will be particularly large in California’s rural and inland areas. When fully implemented, California’s minimum wage will directly affect one-third of the states’ employees.

This large increase will make it difficult for less-skilled workers to find jobs. Employers will not pay workers more than the value they produce. The minimum wage hike means employees who produce less than $15 an hour in value cannot legally work in California. This will reduce employment by approximately one-fifth among affected workers and eliminate roughly 900,000 FTE jobs.

$hould You Raise Your Employees' Pay?

By Scott Shane, Professor at Case Western Reserve University

W

almart, McDonald's and Aetna have all announced that they will raise the pay of their hourly workers.

Should your businesses follow suit?

To answer this question, forget thinking that giving workers a raise will get you some good public relations. The PR will probably go to the big boys who get most of the media attention. Besides, if giving workers a raise is “the right thing to do,” it was probably the right thing to do a few years ago when you didn’t do it.

So that message rings a bit hollow.

Your decision to raise worker pay should be based on careful analysis of how it affects your company’s bottom line.

While it might seem counterintuitive, paying “efficiency wages” – the term economists use for higher-than-market wages – can boost productivity and enhance profits. When companies pay more than the prevailing wage, their employees tend to work harder and are less likely to quit, and the companies can attract the best workers in the industry.

Whether paying efficiency wages makes sense for your business depends on several factors, four of which are particularly important.

IT’S DIFFICULT TO TELL IF YOUR EMPLOYEES ARE SHIRKING

People don’t work as much or as hard as they have agreed to work. If you cannot pay piece rates or commissions to encourage your people not to shirk, and you can’t easily judge how much effort they are putting in, then paying efficiency wages makes sense. If you pay your employees more than they can get at a comparable job down the street, your employees won’t risk getting caught shirking and losing their wage premium.

YOU WANT TO BE SELECTIVE IN YOUR HIRING If some people are better workers than others because they have better skills or more experience, and you want to ensure you have the best workers, then paying efficiency wages make sense.

The best workers will be attracted by the higher pay you offer. As a result, you will attract a wider pool of potential hires.

This bigger pool of potential employees will allow you to be choosier about whom you hire.

WORKER MORALE IS IMPORTANT TO YOUR BUSINESS’S SUCCESS

In some businesses, employee morale can make or break a company. For example, retail customer-service workers who don’t smile or act pleasantly to customers can drive down sales to a point where a business goes under. If employee morale is a key success factor for your business, then paying efficiency wages makes sense. Higher wages boost employee satisfaction, and that higher morale translates into the kind of smileand-act-pleasant-to-others behavior to which customers respond positively.

EMPLOYEE TURNOVER IS COSTLY

Businesses that spend a lot of time on recruiting and training and that have a steep employee learning curve need to keep turnover down to control costs.

If that’s the situation with your business, then paying efficiency wages can help. If you pay workers more than your competitors, they won’t be very likely to quit and take a job down the street.

Several big companies have announced that they are raising worker pay. Whether your small business follows suit should depend less on the public relations value of the move and more on your analysis of the effect on your bottom line. If employee turnover is costly, worker morale matters to your success, you want to be selective in your hiring, and you cannot easily keep your employees from shirking, then paying efficiency wages is worth considering.

Scott Shane is the A. Malachi Mixon III professor of entrepreneurial studies at Case Western Reserve University. His books include Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By

February 2017 │ REFRIGERATION Magazine 23

ASSOCIATION NEWS

A Note from Tony Dickson ent

GLIA Vice Presid

Hello, Great Lakes Ice Association Members!!!

I am pleased to announce the release of the new GLIA web site at GREATLAKESICE.ORG! There has been a total revamp of the website.

I have really put some focus on our suppliers. They are who help bring the information we all need to be the best companies we can be. If you check out their listings, I have added informative videos about many of the vendors.

Please take some time to look at your listing and browse around the site.

A couple of notes: 1. T he deadline for the GLIA scholarship is the end of February. Please send out to qualified people in your business. Currently there is only one applicant. I would love to see more! Apply at greatlakesice.org/scholarship.

2. T he joint Great Lakes/Missouri Valley Ice Association convention is coming soon – March 25-29. If you have not already, please register. We want to see you there!

You can register at greatlakesice.org/convention.

Lastly - membership. Our organization is still strong, but we need everyone to help get those companies in our region to consider the benefits of becoming a GLIA member. I plan to reach out to some on my own. If you know anyone who you think would benefit, please let me know and I will be happy to contact them myself.

Thanks, everyone! See you in March!

Tony Dickson

GLIA Vice President,

Olmsted Ice,

Cool Running Software 440-343-1744

24 REFRIGERATION Magazine │February 2017

February 2017 │ REFRIGERATION Magazine 25

AD INDEX

Ad Index

CLASSIFIED ADVERTISING

American Ice Equipment Exchange, aieexchange.com............................ 22 & 27 Automatic ICE Systems, automaticice.com............................................................ 18 Classified Ads....................................................................................................... 26 – 30 Ice Systems & Supplies Inc. (ISSI), issionline.com............................................ 25 & 28 Ing-Tech Corporation (ITC), itcpack.com....................................................... 21 & 26 Keet Consulting Services, LLC (KCS), kcsgis.com.................................................... 13 KEITH Walking Floor, keithwalkingfloor.com............................................................. 22 LEER, leerinc.com.......................................................................................................... 2 Matthiesen, matthiesenequipment.com................................................................... 6

Rates are $1.00 per word, with a minimum charge. Any blind ads, with an assigned box number c/o publisher, add $10.00. Deadline for upcoming issue is the 1st of the previous month.

Modern Ice, modernice.com........................................................................... 28 & 31

For advertising and listing

Polar Temp, polartemp.com....................................................................................... 8

information, contact Mary

Polar Temp Block Maker, polartemp.com............................................................... 32

at (404) 819-5446 or

Polar Temp Express, polartemp.com...................................................................16-17

refrigerationmag@gmail.com.

Sisco, siscoproductsinc.com........................................................................................ 5

NATIONWIDE ITC EQUIPMENT FOR SALE 1-800-599-4744 • www.itcpack.com ICE MAKERS

PACKAGING

• TURBO CF40 ICE MAKER

• H AMER 125 – NEW, USED AND REBUILT

• VOGT P24A ICE MAKERS (3) • VOGT P34A ICE MAKER • VOGT P34AL W/ HIGH SIDE • VOGT 9000

REFRIGERATION • 20 HP KRACK CONDENSER • LIQUID OVERFEED VALVE PACKAGE • 6.5 BOHN W/ EVAP CONDENSER

•H AMER 125 W/ STAND & CONVEYOR • HAMER RING CLOSERS •H AMER RING CLOSER W/CONVEYOR •H AMER 310 W/ 125 CLOSER •H AMER 535 (RECONDITIONED) •P ALLET DISPENSER • S LIP SHEET DISPENSER

RAKE BINS

• S S SHAKER W/ STAND

• TURBO CB59 RAKE BIN

SCREW AND BELT CONVEYORS

BLOCK MAKERS • B-56 W/ 4 HP CONDENSERS • LEER BL39 W/ REMOTE CONDENSER • TURBO BP-360 BLOCK PRESS

SUPPLIES

• LEER ICE MERCHANDISERS • BAGS AND WIRE • PARTS AND REPAIR

26 REFRIGERATION Magazine │February 2017

• 10’, 20’, 30’ – 9” SS SCREW CONVEYORS W/ MOTOR & GEARBOXES •H YTROL BELT CONVEYORS 10’ & 16’ •P ORTABLE FOLDING INCLINE CONVEYOR •P OWER 90 BELT CONVEYOR

CLASSIFIEDS

SOUTHEAST

USED EQUIPMENT FOR SALE • M anitowoc RNS-244 200lb Ice Makers • Vogt HE40’s 7/8 • Vogt 4000 4000lb 7/8 A/C Ice Maker • Vogt 218, Mid-Tube, W/C, Ten Ton Ice Makers • Vogt P24AL’s 7/8 Ice Makers (2) with Refrigeration • Vogt P24A Large Tube Ice Maker • Vogt 118’s 5 Ton Ice Maker 7/8, W/C • Vogt 118 5 Ton Ice Maker 7/8, A/C • Morris 70 Ton Flake Ice Maker • Turbo CF8SC 5 Ton Ice Makers • Turbo CF88SC, W/C 10 Ton Ice Maker • Turbo CF88SCAR, A/C 10 Ton Ice Maker • 20x14x9T Walk In Freezer

• • • • • • • • • • • • • • • • • •

19x30x12T Walk In Freezer Clinebell B-56’s, 11lb Block Makers Clinebell CB300 300lb Block Makers Hamer 125 Bag Closers with Stands Hamer 310 Form, Fill, & Seal North Star JMR6300 Ice Rake Bins 9” x 20’ Galv Screw Conveyor 9” x 30’ Galv Screw Conveyor 9” x 20’ SS Screw Conveyor 12” x 21’Galv Screw Conveyor 12” x 12’ Galv Screw Conveyor 12” x 15’ Galv Screw Conveyor 12” x 10’ Galv. Screw Conveyor 10LB Ice Cans (45) 4.5” x 8” x 14”T New Jersey Bag Closer Parts Cat Walk Platform for P34 Vogt Ice Shaker Matthiesen Bagger Take-Off System

• M atthiesen VLS, Bottom Load Bagger Belt Conveyor, • 40lb Wicketed “mis-print” Ice Bags • 16lb Wicketed “misprint” Ice Bags • 5lb Wicketed Ice Bags 1/2HP drop In Refrigeration Units • Hog ring Staples (for pneumatic gun) • Magliner Ramp 28” x 13’ 4” • Baltimore Aircoil CXV-184 • Vilter VSM-601 Single Screw Compressor • Type B Multi-System Control Panel • Turbo Ice Sizer • Belt Conveyor, Hytrol TA 21’ • Belt Conveyor, Hytrol BA 10’ • Belt Conveyor, Hytrol TA 12’ • Belt Conveyor, Hytrol 12’ • Large Inventory of Hard To Get Parts

AND MUCH MORE!

If you have discontinued ice bags or used equipment you would like to sell PLEASE CALL. SEE OUR USED EQUIPMENT WEB PAGE AT WWW.AIEEXCHANGE.COM. Call for surplus ice!

Polar Temp Equipment Mike Landino - Toll free - 1-877-376-0367 E-mail (NEW ADDRESS): mlandino@polartemp.com Don’t forget to call if you have a quality piece of used equipment for sale.

HARD TO FIND PARTS? Impossible to get?

CALL FRANK! If he doesn't have it and he can't get it, it can't be found!

Compressors, Vilters, Eclips, MRI 90, York, Y & G Series HDI Compressors, Frick, York, Vilter ALSO

TRAILERS FOR SALE Two 1998 pup trailers – Road Ready

$7,800 each Contact

Ruben Walden at (239)936-3876 or metroice@embarqmail.com

Large Selection of Parts for Compressors, Block Plants.

We buy all types of used ice making & refrigeration equipment.

More Southeast classifieds on the next page »

COMER REFRIGERATION

(386) 328-1687 | (386) 325-0909 (fax) crsrefrigeration@aol.com

February 2017 │ REFRIGERATION Magazine 27

CLASSIFIEDS

SOUTHEAST (continued) USED EQUIPMENT FOR SALE • Turbo Tig 33 Ice Maker, 98 model • Mycom N6WB Compressors w/125 HP motors skid mounted w/oil separators (used with Vogt P34AL ice makers) • Turbo CB38 Rake • Screw Conveyor Drive Packages for 9" and 12" conveyors (great condition) • Hammer RBC with conveyor • Stainless 9" and 12" screw conveyors

"NEW" KAMCO PARTS Ice Systems & Supplies Rock Hill, SC Toll free (800) 662-1273 or (803) 324-8791

• 21' Hytrol belt conveyor • Turbo CB87 with plastic chain and sprockets and stainless steel flights • Morris 18 ton Tube Cube Maker, R22, 2006 model complete with evap condensor 1" ice • Vogt 218, rebuilt in 2005, complete with cooling tower

PLANT MANAGER & REFRIGERATION TECH WANTED We are looking for a Plant Manager of a distribution center in Southwest Louisiana and a Refrigeration Tech.

Resumes may be faxed to 337-238-5095, or e-mailed to westlaice@bellsouth.net.

Candidates may apply in person or mail a resume to: West Louisiana Ice Service, 1707 Smart Street, Leesville, LA 71496-1507.

MIDWEST ICE FOR SALE

WANTED

A Family Owned Ice Company

Used trailer to haul frozen foods – small, only up to 12'

Tube Ice 7, 10, 20, 22 lb Bags Over a million bags in stock Shipped or Picked up

Email: info@WellsFamilyFarms.com

PIQCS Plus Accredited

YOUR AD HERE

Arctic Ice Inc Call Steve Camenzind

Rates are $1.00 per word,

(314) 989-9090

For advertising and listing information, contact Mary at (404) 819-5446 or refrigerationmag@gmail.com.

28 REFRIGERATION Magazine │February 2017

CLASSIFIEDS

NORTHEAST FOR SALE

ICE FOR SALE

Arctic Temp 8000 SM 4-Ton ice machine.

Very low hours, barely used.

Looking for $20,000.

Vogt Mini tube ice, 8, 20 & 40 lb. bags. All ice is screened, palletized & stretch wrapped.

Manny Raza

We deliver or you pick up. Our water is treated with ozone for sterilization. No Chlorine Added!

(732) 684-4464

Martin's Ice Company

Phone (717) 733-7968 or fax (717) 733-1981 PA Merchandiser Parts for all brands at competitive prices.

(877) 984-5945

USED EQUIPMENT FOR SALE 1-800-543-1581

VOGT ICE FOR SALE 5, 7, 16 & 40 lb. bags.

Water is lab tested for purity.

Delivery or pick-up.

Six generations of quality.

www.modernice.com

Ice Makers • Vogt Ice Maker – P24A • Morris Ice Maker • Vogt Ice Maker – P118

Long Island Ice & Fuel Corp.

Call (631) 727-3010

• Turbo Ice Maker – CAR120 • Turbo Ice Maker – CF40SCER • Vogt Ice Maker – P418 • Vogt Ice Maker – HE30

FOR SALE • 140 ft. York herring bone • 4 ton bridge crane • Two Tuffy upenders • Perfection block scorers • Tip tables • 14 can filler Plus other equipment

Call Gary Evans, Clayville Ice Co., Inc.

(315) 839-5405

ICE CARVING TOOLS Plastic liners for clear block makers $1.18/ea Reusable drip pans – from $6.50/ea

• Kold Draft Ice Maker

Check our most recent inventory online at www.modernice.com!

Packaging • Matthiesen Heat Seal Bagger • Matthiesen Baler (3 Available) •H amer Form, Fill, and Seal Machine - 310 Handling • Matthiesen Shaker Belt with Stand • Shaker •1 2” Stainless Steel Auger (Several Lengths) •1 2” Stainless Steel Shroud Trough Cover

EQUIPMENT FOR SALE Suction Accumulator - Chil-Con, Model # AA24084, 24” x 7’ high, with boil out coil – Like new condition $6,000.00 Receiver 12’ x 30” with warming loop used with Vogt ice makerLike new condition - $6,000.00 Toshiba 125 HP Motor, Premium Efficiency Contact Kyle at Long Island Ice & Fuel Corp.

(631) 727-3010 or (516) 790-6842

Over 500 items in stock for Ice Carvers

www.IceSculptingTools.com

or (440) 717-1940

February 2017 │ REFRIGERATION Magazine 29

CLASSIFIEDS

SOUTHWEST

EQUIPMENT WANTED

FOR SALE (1) Vogt P118 Reconditioned.

Runs on R404 Freon.

(1) Mini Tube Vogt, air-cooled 404 Freon

VOGT´S P24s and P34s used in any condition. Only MID or LARGE ice.

Ice RAKE 30 tons or less used.

CONTACT US BEFORE YOU SELL!

LPIceEquipment@gmail.com

(1) Mid Tube Vogt, air-cooled 404 Freon

(809) 350-8297

(1) Rebuilt CB P118

Vogt 6000 and Vogt 9000 Call Charlie Bolton Houston, TX

(713) 643-0573 FOR SALE

2005 12 Ton Kamco Bin in good condition, $5000.

Contact Greg LeBlanc at Orange County Ice Bridge City, TX

Call Charlie Bolton (Houston, TX)

(713) 643-0573

WANTED

ICE EQUIPMENT

(409) 920-0037

WEST ICE CRUSHER/SNOW BLOWER FOR SALE Snow Blower-Tri-Pak 300lb. Block Ice Crusher/Blower on Tandem Trailer. Ford 300 Inline 6 Industrial Gas Engine, Original owner, well-maintained, very clean, unabused machine! Will sling ice 70'. In Southern California.

Will ship anywhere!

$29,000 Call (661) 269-2093

PACIFIC ICE BUSINESS FOR SALE Successful ice manufacturing and distribution business for sale.

Established in 1983, located in Eastern Wash.

Owner is retiring.

Enjoy life and semi-retirement in this profitable business.

Sale includes buildings, land, equipment, vehicles, and rental property.

Miscellaneous ice merchandisers for sale Glass and solid door.

Contact Refrigerationmag@gmail.com for more information 30 REFRIGERATION Magazine │February 2017

ICE MANUFACTURE AND SUPPLY BUSINESS FOR SALE HAWAII • Strong existing customer base • $200K Annual Sales • Vogt Ice Machines • 3-Ton Stainless Steel Auger • Feed Ice Bin • 2,500lb Storage (Walk-in Freezer) • Isuzu MPR Refrigerated Box Truck • Turn-Key

Call (808) 384-7033 for more information. $80K

CLASSIFIEDS

Modern works with packaged ice clients who face increasing costs and require financing solutions and technical and engineering assistance to decrease downtime and increase their profits.

Modern helps those clients with sales and terms programs, the best equipment and automation solutions, our Freeze Force technical support team, and by utilizing the best buying practices and inventory controls.

Contact us to review your critical concerns – we are the company to partner with to create solutions for your business!

CALL US TODAY at

1-800-543-1581

Learn more about Modern at

WWW.MODERNICE.COM