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Minimum wage jumps

Area business owners say the federally mandated minimum wage hike that takes effect Thursday will make juggling already-rising expenses difficult. The minimum wage will go up from $5.85 to $6.55 per hour — a total increase of 70 cents.

By Katie Stallcup Staff writer
Published: July 24, 2008

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Area business owners say the federally mandated minimum wage hike that takes effect Thursday will make juggling already-rising expenses difficult.

The minimum wage will go up from $5.85 to $6.55 per hour — a total increase of 70 cents.

A jump in pay means juggling ever-increasing overhead costs, Jim Bob’s Chicken Fingers owner Chuck Ferrell said.

“It’s going to be costly to all retailers,” Ferrell said. “But I don’t disapprove of it. I feel like we need to be as fair as we can with employees … We have about 50 employees, and it affects us.”

With rising fuel and energy costs, it’s already getting more expensive to do business, he said.

“If (the cost of business) gets too high, you have to cut back,” he said. “We want to keep everybody we’ve got. But it will affect retailers and how many employees they can afford to keep.”

The wage increase is aimed at helping workers deal with rising food and energy costs but falls short of meeting the level of inflation.

Dixie Foster, who works at the locally owned Opelika restaurant, said she was glad to see the raise, especially with rising costs of living, but she wasn’t sure how much good it would do.

“Even with the minimum wage going up, everything else is going up, too — gas, food, everything — so it’s not going to change anything,” Foster said.

Her coworker Julie Doler agreed.

“Everything’s getting more expensive, so it doesn’t make that much of a difference,” Doler said.

When wages and other costs go up, those costs get passed on to the customer, said Brian Moore, owner of Tenda Chick in Auburn.

“We try to keep prices reasonable so customers get a good value, but when prices go up, you’ve got to go up in your prices, too, or go out of business,” Moore said. “It’s a simple formula.”

With minimum wage scheduled to increase again next year to $7.25, per federal law, Moore said doing business wasn’t likely to get cheaper anytime soon.

“That’s a pretty good chunk, percentage-wise,” he said. “That means over the next few months, prices are going to take a jump again, regardless of what business you have.”

The Associated Press contributed to this article.

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