The proposed changes are proposed like this:
Standard Entry Level Jobs
Today 8.00/hr
May 1/11 $8.75
Nov 1/11 $9.50
May 1/12 $10.25
Liquor Servers (From Waiters to Bartenders)
Today 8.00/hr
May 1/11 $8.50
Nov 1/11 $8.75
May 1/12 $9.00
For students working to pay off school like me, this seems like a wish come true. However, many business owners do not particularly have the same view. The amount of money it takes to get a specific task done will then be increased by $2.25 / hour per person! Although this may seem like much, even small businesses have at least 15 to 20 employees minimum! This leads almost to a $33.75 to $45.00 per hour. It becomes apparent to many small business employers that this might not be the most worthwhile, most likely leading to hour cutting or layoffs.
Theoretically, let's say that a restaurant makes approximately $500,000 a year. In general, general labor and wage cost will be approximately 30% ($150,000). With this wage increase, the wage cost is then increased by another $45,000! This pushes his wage cost up to $195,000, and operating in a declining market. Then it is possible that he will make one of two choices, either to increase his prices (not advisable) or to terminate employees (most likely).
However, not everybody has this same view. Many people feel that the increase in minimum wage will actually help our economy. They are under the common view that people with money in their pockets will most likely spend that money on small businesses in the economy. In addition, because the increase is done in increments over a period of a year, the consensus is that the increase might not necessarily be drastic upon employers.
It is hard to say whether the increase to minimum wage will create positive consequences or negative consequences. The result might be both. The only way to tell is to sit back and see what will happen.
