Some question wage increase
Published 11:59 pm Friday, July 24, 2009
The minimum wage increased 70 cents Friday, to $7.25 an hour, but both local employees and employers alike question whether the move is a good thing in the current economy.
Andalusia Sonic Drive-In employee Barbara Richardson said she works between 30-35 hours each week and is currently searching for a second job because “everything is so expensive.” She lives in Andalusia and helps to raise her niece and nephew.
She was ambivalent about the minimum wage increase, saying that while it will be nice to have more money, she doesn’t think it will have much noticeable effect.
“Everything else is going to go up in price,” she said.
This is the third straight year the minimum wage has been increased. Richardson said she was working a minimum-wage job in Florida last year, when the wage jumped from $5.85 to $6.55.
“It didn’t make much difference,” she said. “The power rates went up, gas prices went up, the cost of food went up. (The politicians) say this is going to help the economy, but it’s going to be the lower classes who are most affected by it, because even if they have more money the prices on everything else is still going to go up.”
Richardson’s boss, Andalusia Sonic Drive-In owner George Momenpour, was also skeptical the minimum wage would help low-income workers.
“The people who will get the increase, in reality I don’t think they’ll see much from it,” he said. “Everywhere they go, they’ll find the prices are only going to go up.”
Momenpour said he has between 15-20 minimum-wage employees at his business, or roughly half the work force. He understands the need for a minimum wage increase, but said now is not a good time, with the economy still trying to rebound from a recession.
“It’s a great thing to eventually happen; you want people to have a little more money in their pockets,” he said. “But this just isn’t the right time right now. The economy is slow and we need growth. We need to move forward and create jobs for people, rather than possibly losing jobs because businesses can’t afford to pay the higher wages.”
He said Washington politicians are trying to score some quick and easy political points without considering the consequences.
“I’m sure they think they can get a few votes from this,” he said. “But I think the real reason is Washington needs more tax money. If you look at somebody who’s working for $8 an hour and for 40 hours, then that’s $320 that will get taxed. But if you raise the wage to $10 an hour, then that’s $400 that could be taxed. It’s pretty obvious which one the government would prefer.”
Momenpour said he believes many small businesses will have to pass the costs of the increase to their customers, either through lower quality service or through higher prices.
“As a business owner, you can’t make your consumers absorb all of the hit,” he said. “That’s not the right way to do business, and I’m not planning on doing that. You still have to make sure the customer gets the best service and quality possible. But it’s going to have an impact somewhere.”
Richardson said she plans to use her wage increase to “pay off some bills.”
U.S. Secretary of Labor Hilda Solis said between 3 million and 5 million people nationwide will be affected by the minimum wage increase.