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.