Employees weigh benefits of minimum wage increase
Published: Monday, February 25, 2013
Updated: Monday, April 22, 2013 21:04
As an employee at a business on Main Street, junior Brianna Dulio sells items, greets guests and helps customers with questions. For her work, she said the current minimum wage is not nearly enough, but she does not think any raise would be sufficient.
“I don’t think you can ever put a price on what we do,” Dulio said.
Because of a new initiative introduced by President Barack Obama, employees like Dulio could see an increase in pay.
Earlier this month, Obama called on Congress at his State of the Union address to raise the minimum wage to $9 per hour. On a federal level, the current minimum wage is $7.25 per hour. It was raised from $5.15 per hour in 2007 by former President George W. Bush. By upping pay to at least $9, Obama said minimum wage would equal a living wage.
“It could mean the difference between scraping by and finally getting ahead,” Obama said during the speech.
But in Delaware, where the state minimum wage meets the current federal minimum wage, local business and small business organization employees said if this number were to increase, local businesses would face significant problems.
Bob Older, president and founder of the Small Business Chamber located in Newark, said a 21.5 percent increase in minimum wage would prove to be detrimental to small businesses hoping to grow. As an organization that brings together businesses to help them grow, the businesses represented by the Small Business Chamber would be significantly hurt by a sudden increase in minimum wage, Older said.
“It’s going to change the way people do business,” Older said. “People are either going to cut hours to offset those wages, or it’ll hurt our economy incredibly.”
In a recovering economy, an increase in employee pay would prevent small businesses from expanding, Older said. He said increasing the federal minimum wage by the largest amount in 40 years could potentially increase unemployment as businesses will no longer be able to keep up with the needs of their employees.
When the cost of labor is raised, a business will inevitably be affected, Terry Logue, general manager of the Greene Turtle restaurant, said in agreement with Older’s sentiments.
In the state of Delaware, minimum wage for servers at restaurants is $2.23 in addition to tips. However, if an employee’s hourly wage and tips do not meet minimum wage, employers are required to match the remaining difference to meet at least $7.25 per hour.
“Economically, if you raise the cost of labor, prices will be raised,” Logue said.
To lessen the impact, the government should stagger the minimum wage increase over a two- or three-year period to make it manageable for businesses, Older said. If the new pay scale is phased in, he said businesses will have time to adjust.
While the jump in employee pay would affect businesses, Older said it is not necessarily possible to live solely off minimum wage. Yet, many of those who make $7.25 per hour live at home or are students and have chances to receive pay raises, he said.
As a student who has to pay for her own groceries, Dulio said she is “living paycheck to paycheck.” While she does receive financial assistance from her parents, she said living completely off minimum wage would be impossible. With the current minimum wage, employees working full time make $15,000, according to Forbes Magazine, which is oftentimes below the poverty line.
Weekly, she said she spends up to $80 on groceries a week, which she considers a significant amount for someone only making minimum wage, she said. If she were a full time employee earning minimum wage, she does not think she would be able to survive, she said.
“The cost of living has increased so much, yet our minimum wage has stayed the same,” Dulio said. “I don’t get why wages are staying the same as everything in the world is becoming more expensive.”
Zack Gheander, general manager of Pita Pit, said he is in full support of a minimum wage increase, but would like to see it phased in over time. As for his business, he said not much would change and does not expect to cut his employees’ hours, he said.
“Right now, we pretty much have the schedule as tight as possible,” Gheander said.
If anything, an increase in minimum wage would give incentive to employees and encourage them to work harder, he said.
As a daughter of a business owner, junior Amanda Mouser said she understands the effects raising the minimum wage would have on local business owners. However, she said she remembers minimum wage being $5.15 per hour when she was younger. As the cost of living has increased since then, the minimum wage should grow as well, she said.
“It’s about time we start thinking about it,” Mouser said.