Minimum wage increase of 70 cents will have ripple effects

By Jola Szubielski - bio | email
Posted by Phil Riggan - email

CHESTERFIELD, VA (WWBT) - Starting today minimum wage employees will see a big jump in their hourly pay. The pay rate will increase from $6.55 to $7.25 -- a $0.70 boost!

Some say the increase could just be the boost the economy needs, while other say it could have a negative impact at a time when businesses are already struggling.

Brandon Hughes works hard for his money, delivering burgers and fries and fantastic customer service. All for minimum wage.  A $0.70 bump in pay is huge.

"Cause $6.50 is not really a lot, so yeah, a lot better, making a lot more money and I'm happy about it," Hughes said.

And while much of what Brandon earns will go into savings, he's not about to shortchange himself.

"Obviously I will spend some going to the beach in a few weeks and I'm going to have a little fun with the extra money in my check," he said.

And that's exactly what some are hoping for -- a boost in wages equaling a boost to the economy.

But for business owners there may be a downside.

"It makes it a little more difficult on us, keeping the labor down, they're going to have to work a little harder," said Rod Pitcock, Sonic General Manager.

Most we spoke to weren't too concerned about the impact of the increase, but the potential for having to pass the buck onto the consumers is a real possibility.

"Not a factor here, I can see how some businesses that being a factor, maybe having to lay off to help cover that as well," Pitcock said.

Home restoration company, Nichols Incorporated employees earn more than minimum wage, but the increase may still have a ripple effect even on them.

"We're limited on their deductions because we can't drop them below minimum wage, so with the increase that raises a concern for us," said Diane Scott, general manager Nichols Incorporated.

There's also pressure to up other workers salaries, even at a time when annual merit increases are difficult to come by.

This is the third minimum wage increase since the summer of 2007.

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