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MINIMUM WAGE: Rise Could Hurt Small Businesses

On Tuesday night in his State of the Union Address, President Obama announced an order to raise the minimum wage for future federal contracted employees from $7.25 to $10.10.

Representative Bruce Braley believes minimum wage should be raised for everyone.

“For the people that are depending on minimum wage income and living below the poverty level this isn`t just a matter of minimal significance. In fact if the minimum wage was restored to $10.10, as I’m proposing along with Senator Harkin, it would impact incomes of 300,000 Iowans.”

However, Senator Charles Grassley says the president’s priority on raising the minimum wage is misplaced. He released this statement last night after the president’s proposal.

“We ought to reform the tax code to close loopholes and give job creators the certainty and confidence to expand, hire and raise wages. We can`t tax and spend our way to prosperity through government.”

Small local business owner, Jeff Bianchi watches as his own employees struggle paycheck to paycheck.

“I hear daily the employees come back who say my car broke down and I can’t wait until next week to get my paycheck.”

However, Bianchi, owner of Bianchi Boys Pizza and Pasta says, “it’s a double edged sword.” Bianchi says he approves his employees making more money but an increase in wages comes at a cost for his business. He describes it as domino effect. He says the restaurant would have less money than in turn he would have to lay off some of his employees and ultimately having to increase his restaurant prices.

“There’s know way that we could absorb all of that and not at some point pass that along and still be in business.”

If the bill were to pass, wages would initially increase by 95 cents.

4 comments

  • Coffee Pot

    I was caught up in a federal funded program and they came in and said we had to pay bacon davis wages, which was by county 20.00 23.00 and 25.25 an hour. And they didn’t care if it was a guy that just opened doors. Then you had other bidders come in with NO employee’s and did two and three men jobs supposedly by themselves. And the bids were cheaper. The govt hired people to come check and make sure your employee’s were paid this, but you never saw them. When the federal money ran out, people were fired, and the trucks the state bought had to be sold and money given back to the feds. Made a disaster out of a good state program is all it did. Read between the lines. Obama’s speech was AGAIN full of empty promises and same old stuff. He is not Santa Claus.

  • Troy V

    The government will NEVER understand that raising the minimum wage only moves more people toward the poverty line.
    Minimum wage jobs are not intended to raise a family (although the GOP, Dems, and everyone else from State to Federal level seem to think so).
    Minimum wage jobs are for ENTRY LEVEL workers (ie: high schoolers first jobs, college students). You use those jobs to prove you are a good worker and are reliable to land a better job, and then use that one land another one and so on and so on.
    Raising the minimum wage does not raise wages for everyone else, so basically 20 years ago minimum wage was $3.35 per hour and “good jobs” where I lived paid $12-15 per hour). Here we are 20 years later and they want minimum wage to be $10 per hour and those same good jobs are paying $15-17 per hour (so, the lower level worker got a $7 per hour raise and the skilled workers got a $2 per hour raise over the same time).
    The problem is that goods and services (Wal-Mart, grocery stores, fast food restaurants, etc.) are those low level jobs, therefore the price of goods has increased as well, which has moved those skilled workers closer and closer to the povertly line (eventually the minimum wage will be as high or higher than some skilled workers are making).
    I hate to break this to the “law-makers”, but $12 per hour in some parts of the country is a VERY GOOD JOB (cost of living is low), while in others (NY City for example), a $30 per hour job is probably barely paying the bills. you cannot legislate wages, you have to let the companies do that on thier own (when they can’t get people to work for $5 per hour anymore, they start offering more $$), when $30 per hour doesn’t get them the workforce they want in NYC, they’ll up it to $35 to get the workforce they want.

  • Susan

    Yep, I have a college degree and 25 years experience. if they raise the minimum wage, I won’t be making much more than a high school kid. So…how do I convince my kids to go to college? They can go to college, work hard and get a ‘good’ job, living barely above the new poverty line, or they can drop out of school, work at McDonald’s and have about the same standard of living?
    The government is the one that raises the minimum wage, but, the employer is the one that has to come up with that extra wage money. Increased minimum wage = increased layoffs and increased overall prices.

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