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Minimum wage rises, so does business cost

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By Christian Jennings - bio | email

July 21, 2008

ALBANY, GA (WALB) - Minimum wage workers are getting a raise. The rate goes up Thursday from $5.85 to $6.55 an hour. Employees love it, but business owners say it will hurt them.

With the mandatory increase of wages coming, many hourly workers are breathing a sigh of relief.

"It's really gonna help me out because I've had this job for over a year now, and I've had to pay for my insurance on my car, and gas," Kathleen Brown said.

"The economy and the price of gas and the cost of living now is higher so it's gonna help a lot of people," says Marvin Alston.

"It'll help with the gas. 'Cause I mean, gas is going up like four cents everyday," Lorenzo Newkirk says.

The common theme here? Gas prices. People are struggling to pay for everyday necessities and say the increase will only help their cause.

Thursday's raise is part of a three-phase minimum wage increase put in place last year by Congress.

Last July wage requirements jumped from $5.15 an hour to $5.85. Then this Thursday,  it will rise to $6.55. Come next year, hourly workers will be making at least $7.25 an hour.

"Everything's just hittin' us all at one time." Sandy Jones, TCBY store owner, who has a different perspective. She already pays her employees more than the minimum wage to attract more workers. She's concerned with the negative effect the new requirement is going to have on her store and menu prices.

"Restaurants are getting hit not only with gas prices but the surcharges - you know less customers because people are not out as much. So I'm just gonna watch my bottom line and see how it goes," said Jones.

Economists are also in debate over the increase. Those against the change are worried about teenage employment.

"Businesses, when they start to see minimum wages go up, they're more likely to hire older workers, because they're going to be more responsible and more productive," says Aaron Johnson, an Assistant professor of economics at Darton College.

A problem that 17-year-old Kathleen Brown can't afford. "They make all of us kids have a job when we're 16, and pay for our gas and insurance."

Only time will tell what the increase will do for Georgia's economy in the long run, but it's making several Georgia workers happy for now.

Restaurant owners said they may have to raise their menu prices to compensate for the employee raises.

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