Minimum-wage bill causes concern among business owners

A recent bill introduced in the U.S. Senate to increase the federal minimum wage has some local business owners concerned.

Sponsored by Sen. Tom Harkin, D-Iowa, the bill would raise the federal minimum wage gradually. The $7.25 base would increase to $8.20 six months after official approval, $9.15 after one year and $10.10 a year after that. In Missouri, minimum wage is set at $7.50 an hour, just above the federally mandated level.

For "tipped workers" such as waiters and other restaurant employees, the bill would gradually boost the $2.13 minimum to 70 percent of the full minimum wage. The bill also calls for the minimum wage to increase automatically each year to adjust for inflation.

The Senate is expected to begin debating the bill today.

While the bill faces a long road ahead before becoming law -- the Republican-led House would have to consider and vote on it as well -- many employers are already contemplating what the increase would mean for their businesses. For small business owners especially, it could cause a financial burden.

Laurie Everett is the owner of Annie Laurie's Antiques on Broadway Street in Cape Girardeau. She has about five employees, and said such a dramatic increase in the minimum wage would be difficult for her business to absorb.

"I probably wouldn't be able to have as many staff members as I currently have if the minimum wage increased to $10," she said. "I would probably have to either work the people I currently have fewer hours or not have as many people as I currently have working here."

Those who stand in favor of raising the minimum wage say it would bolster consumer spending and strengthen the economy because workers would take that money and put it back in the market by buying goods and services. The AFL-CIO, a supporter of the increase, says on its website "if the federal minimum wage had kept pace with workers' productivity since 1968, the inflation-adjusted minimum wage would be $18.67."

Tina Abbott, who owns Cup 'N' Cork with her husband Patrick, said she understands that point of view, but isn't sure a boost in minimum wage would actually translate to an economic boost. Like Everett, she said an increased minimum wage could mean a decrease in hours for employees.

"In my opinion, [workers] would actually be making less because they have less hours," she said. "It's just not feasible. I understand the trickle down, 'You spend more, you pay more; they spend more, you make more,' but if I start paying $10 an hour this week, they're not bringing in $10 an hour more worth of business next week."

That's if her employees could get any hours at all. If minimum wage did increase to about $10 an hour, Abbott said it would probably force her to lay off the restaurant's five or six employees. All "mom and pop shop" owners, herself included, already "live right on the edge."

"I would probably have to get rid of everybody and close down," she said.

The bill has drawn a line between the two parties, with most Democrats in favor and most Republicans against. Even if all the Democrats in the Senate back the measure, those numbers would be about a handful short of the 60 votes needed just to begin debate. Senate Republicans could vote in favor of beginning debate but vote against the measure, but few have publicly announced willingness to do so. If the bill is approved by the Senate, it's not likely to be received favorably in the House.

srinehart@semissourian.com

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