Minimum wage on the rise - WALB.com, Albany News, Weather, Sports

Minimum wage on the rise

July 23, 2007

Albany -- Millions of Americans are about to get a raise. Tuesday, the national minimum wage will rise from $5.15 to $5.85 an hour.

Of course that's good news for many workers. But what about their bosses and consumers?

While the lunch crew at Maryland Fried Chicken in Albany is serving up fried meals on North Slappey, the U.S. Government is just hours away from raising the federal minimum wage average.

17-year-old Abrigale Johnson welcomes the change. She says, " I think it's a good thing. Since I'm a student, it helps work towards getting my car, and having extra money after school and stuff."

But the increase in Abrigale's and other employees paychecks will likely have an affect on Maryland Fried Chicken's budget. Richard King has operated this business for 20 years. 

"Well it's going to have a huge affect on the business. I looked at the figures a few minutes ago, and it's going to cost me a extra $200.00 a week just on extra payroll," he said.

For the first time in 10 years, the national minimum wage will be raised from $5.15 to $5.85 an hour, a 70-cent increase.

While this increase is good news for workers under the current plan, some small business owners fear it could hurt their businesses.

"I've got to figure out a way to save $200.00 a week because we weren't making that much money to begin with. I just can't absorb a $200.00 a week loss without doing something. The only thing I know to do is to go up on prices or cut back on hours," says King.

Here's how the current increase works: Tuesday, the minimum wage will rise to $5.85 an hour. A 70-cent increase will follow annually for the next two years, ending in 2009 with the national minimum wage reaching $7.25 an hour.

Looking ahead, King remains optimistic. "I just hope that experts know what they're doing. We just put our faith in their hands, and if it's good, that's great," he said.

And that of course is something that only time will tell. Critics of the minimum wage hike say it will force many small businesses to raise their prices or layoff workers to offset the extra cost.

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