BUSINESS DESERVES BREAK FROM MORE WAGE HIKES

Monday, the minimum wage rose to $4.25 an hour. But not all minimum wage workers have cause to celebrate: They may find themselves out of a job.

The fact is business may have a hard time absorbing these continued mandated wage hikes. We all will ultimately pay for the wage hike through the increased price of products and services. Companies may keep payroll costs stable by cutting people, or reducing operating hours.

The minimum wage rose from $3.80 in 1990 to $4.25 this year. Many businesses are still reeling from another 45-cent increase exactly one year ago (the rate was $3.35 in 1989.) Granted the 90-cent rise in two years followed a nine-year status quo in the minimum wage. But the government has sure made up for lost time in a hurry.

Particularly hard hit is the service industry, especially fast-food establishments and retail stores, which rely on a teenage work force. Some part-time teenage help may find themselves replaced by full-time workers.

The rise in minimum wage also creates other headaches for business. If your lowest paid workers receive a 45-cent raise, it figures that the rest of the workers will want the same remuneration. They have a legitimate point, but most businesses probably can't afford the added cost.

Many businesses are probably hoping that Congress will give some breathing room before passing the next minimum wage hike. And it's not just businesses that are affected. Municipalities and state governments must absorb these increases, too. In the city of Cape, the last two minimum wage hikes cost the city an additional $100,000. That will put a strain on an already tight budget.

Adding to the confusion is the fact the new legislation mistakenly nullified the exemption for small retail businesses, which had been in effect since 1938. The exemption had applied to all retail firms with annual gross sales below $500,000. More than a million U.S. businesses fall in this category. Lawmakers are apparently scrambling to correct the oversight.

It's not that minimum wage workers don't deserve an increase in pay. It's just that many businesses may have a hard time absorbing these increases while maintaining appropriate net profits. Without profits, a business can't afford to operate too long. It's not as if this is the only cost increase businesses have had to absorb: Add on federal tax increases, postage rate hike, and a sluggish economy.

Congress should pause before rushing to another minimum wage hike. They should give business a chance to catch its breath and revive its profits.