Businesses take a hit as 10 states raise minimum wage

Happy New Year! On Jan. 1, nearly a million U.S. workers will get a fatter paycheck when 10 states — Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont and Washington state — officially raise their minimum wage by 10 to 35 cents an hour, according to a recent Fox News report.

In an ongoing national debate, unions and labor activists argue that raising minimum wage is good for the economy, but business owners disagree.

Economists weighed in on Fox News:

Michael Saltsman, a research fellow from the Employment Policies Institute, said raising the wage does not actually reduce poverty, and businesses looking to avoid the higher cost of untrained workers may begin hiring fewer people to work fewer hours.

Brian Wesbury, chief economist at First Trust Advisors, cautioned that any time a state raises the minimum wage, it runs the risk of allowing another state to be more competitive.

“Let’s just say we have two states that share a border and one state raises the cost of labor by raising the minimum wage. What will happen is businesses in the state that does not raise the minimum wage will now have an advantage,” he said. “They can sell their product for less because … they have a lower cost of production.”

Sen. Tom Harkin, D-Iowa, disagrees and has introduced legislation to raise the federal minimum wage from $7.25 to $9.80 over the next two years, according to Fox News.

“It is long past time to establish a fair minimum wage in our country,” said Harkin, according to the cable news station. “It is good for families, good for business and good for our economy, and, most importantly, it is the right thing to do. People who work hard for a living should not have to live in poverty.”

 

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Michele Kirk

Michele Kirk is a writer, editor, and field reporter for BizPac Review. Michele can be reached at michele@bizpacreview.com & @michelekirkbpr
About Michele Kirk

Michele Kirk is a writer, editor, and field reporter for BizPac Review. Michele can be reached at michele@bizpacreview.com & @michelekirkbpr

  • Patriot1742

    I think all democrat run states should raise their min wage to 25.00 an hour – this would add so much new tax money so the federal government can spend more.

  • Ron Jackson

    In today's economy the minimum wage does need to go up, however in this economy where businesses are struggling to keep their doors open it will hurt the economy by putting more people out of work while businesses struggle to try to keep going. Lots of businesses are no longer hiring full time employees so they do not have to pay the Obama care and some are decreasing their numbers of employed to less than 50 for the same reason.

  • Sheila

    Obviously Ron you don't live on minium wage. Im 65 and work 2 jobs just to make ends meet.

  • Darren

    Since when did the government become a union to run businesses out business? A good company will pay their employees a decent wage or the employee will go somewhere else. For government to forse a small business to raise thier pay scale will make more businesses to lay off employees and make those left to work harder or be replace withsomeone who will.

  • seazen

    Gee, all the way to $9.25/hr. They will be living high on the hog earning about $20,000/year! I mean they were already making $15,000. Just think of all the things they can buy with that! Next thing you know they will be buying homes in Palm Beach and driving Ferraris along A1A. But, with that outrageous increase, the cost of a pizza might go up another nickel and we might have do our own yard work. And Sheldon Adelson will have to lay off half the people working in his casinos. Horrors!!

  • http://Bizpac Ted

    The "minimum wage" is just that. It is the minimum a business has to pay you. The business would probably pay you less if they could. I'd like to know how may of those opinionating on this subject have actually lived, with a family, working for a minimum wage. This amount is not a living wage. Many people are in situations where the minimum wage is all they can get. That can also be because their jobs were outsourced by an American company that was given tax incentives to take these jobs overseas. These jobs that are being misplaced can be for those of all current income levels and education. Ask yourself: In what circumstance could you expect an American worker to support a family on some of these overseas wages. $400 a month is an average wage of Apple workers in China. How long would you expect the workers in China, a Communist country that is supposed to have worker equality, to ignore the Chinese billionaires in their country. Its always a sum zero game. The pie is only so big in any circumstances. If my piece of the pie is larger, then, yours is smaller. Choose. I personally that, through it all, America has it all. All of our problems, we can solve. Think about it: "Les Miserables" is also a social message. I did used to think that $10 an hour was a lot of money. Back in the '60s.

  • Big Bamboo

    "Jerkin" Harkin mimics and echoes the far left's mantra. What will happen is what always happens when the minimum wage goes up beyond free market sensibilities. The teenage unemployment numbers will jump higher because it is not economically justifiable to pay them the higher wage. Untrained workers will cost too much and fewer of them will be hired, or machines will replace them. More jobs will be shipped out to China, India, South America. When all that happens, Seazen and his Socialist buddies can slink off and lick their wounds, and sing another chorus of "Woe is me".

  • Jenna

    To anyone working a job on minimum wage, I would suggest instead of fighting for that position to have a raise, make yourself into a hir-able position to reach for better. A lot of positions are really low work and raising the wage is not fair to small businesses who may not be in business long enough. Instead do yourself a favor and make yourself hire-able to a better job. I have never worked a minimum wage job. My first job was back in 2001 when I was 15, Minimum wage was under $6 dollars an hour, I was hired at 6.25. 5 years later when I was still at that job, but working a second job, I was getting paid more at the second job, which hired me for $8.55, I was only being paid 8.20 at a job I worked at for 5 years. In all these years going forward I have made myself worth more. That current job only hires people from that position at minimum wage of 7.25 now, my sister is a chef there now and sees people my age trying support a family of 4 on the minimum wage. They could be reaching for more IF they spent the time to sharpen their skills, create better customer service experiences and give more. But those workers are lazy and shouldnt be getting paid much because they dont contribute.When I own a business which will be a Bakery, counter staff will be paid minimum wage. But I will create opportunities for a raise but they will do more then just babysitting the counter. Go up to your local job that pays minimum wage, from McDonalds to the gas station. Are those employees worth 10 dollar an hour? If you ran a gas station would you pay someone 10 dollars to sit around and doing nothing. Are they contributing to the society? There for ask yourself now if you dont get paid enough do you think you contribute a lot your job? If the answer is yes, then ask yourself why do you continue to sell yourself short? If it is a no, well how many people actually admit that they dont, but you know there are the lazy coworkers that dont deserve to be at the job, you could very well be one. Work harder, do better, always be looking for a job that appericates you. It probably wont make you rich but time is money, if you are a time saver you deserve a better job. If you waste time at work and treat your customers bad maybe that's why you cant make wage. No-one wants a crappy worker. Now the more we pay the minimum the more our burgers go up in price, and the less our money is worth. Lets say minimum wage moves up 3.00 an hour to 10.25, if someone who currently makes 11 will not be getting a 3 supplement and they are probably doing a lot more work then a cashier. Because all these minimum wage workers are getting paid more they will create more demand so our products will go up to pay for the wages. So it will be the lower middle class that suffers, the ones who get paid 10-20 dollars an hour. Dont forget about us. We spent years working our butts off moving up with a company and getting raises. You will destroy our hard work by thinking minimum wage should raise. That job is a stepping stone. Dont take the easy way out. Make yourself a better employee or find a better job instead of expecting the minimum be raised.