Longview business owners: Minimum wage bump means increase in prices
Feb. 13, 2013 at 11 p.m.
Some Longview business owners voiced concerns Wednesday about President Barack Obama's proposal to raise the minimum wage to $9 an hour and tie it to the cost of living. The proposal was one of the key issues from Tuesday's State of the Union address.
The minimum wage of $7.25 per hour became effective in July 2009 as part of the Fair Labor Standards Act, an increase that at the time caused strains of its own in the form of higher prices at businesses.
"Several customers did complain or mention it when I did go up in price," said Bebe Church, owner of Brian and Scott's Snowballs.
Church said the 2009 minimum wage increase affected all her workers and raised her prices.
The snowball stand that employees six workers during the spring and 14 during the busy summer season could only support pay raises across the board along with price increases, Church said.
"I would have to raise prices drastically from what they are now. It is going to hurt more of the customers that are on a fixed income and who won't see an increase in what they are being paid," Church said.
"I don't necessarily think the demand would go down, but if I am trying to make the lowest price desert in town, it's going to be harder to accomplish."
Dudley Lang, owner of Dudley's Cajun Cafe in Longview, said the increase - a proposed $1.75 an hour leap - would make it even harder for companies to adjust.
"It's going to put a lot of people out of business. When you jump minimum wage that far, from $7.25 to $9, two things are going to happen," Lang said. "First of all, any business in that situation is going to increase prices."
Lang also was concerned that increased minimum wages would increase taxes that are paid by the worker and matched by companies.
The businessman said the pay of about 15 of his 20 employees would increase if the federal minimum wage goes to $9. Like Church, he said, higher prices for his products would be necessary to keep his doors open.
Server Colton Morace agreed saying, "When you increase minim wage, the cost of living goes up."
In his State of the Union address, Obama urged Congress to not only raise the minimum wage but tie it to the cost of living so it could be adjusted naturally each year.
"This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets," Obama said.