President Obama’s call to raise the federal minimum wage $1.75 to boost the pay of millions living in poverty has some local business owners saying the idea will cripple rather than aid economic recovery.
“There’s no doubt in my mind that it would hurt the unemployment rate,” said Chris Cunningham, the president of Wife Saver Inc., a chain of eight independently owned and operated fast-food restaurant franchises.
Increasing wages to $9 an hour, as Obama proposed in Tuesday’s State of the Union address, could force Cunningham’s business to eliminate jobs, he said.
About half of the 150 employees across the restaurant chain earn the $7.25 federal minimum wage, Cunningham said. During the last wage increase in 2009, he lessened his workforce mainly through attrition.
“It has to come from somewhere,” Cunningham said. “You either have to raise the prices or cut back on the number of employees.”
Henry Colley, the vice president of operations for Sprint Food Stores Inc., would likely have to raise the wages of all hourly employees, not just those earning minimum wage. Those paid higher than the minimum would expect a proportional increase, he said.
“It’s going to cause a raise across the board,” Colley said.
Of the 150 employees at 14 Sprint convenience stores in South Carolina and Georgia, about 20 percent earn minimum wage, he said. Labor is the largest expense in his operation.
“It’s going to be reflected in the retail price,” he said.
Hiram Thompson, the owner of Thompson Wrecking Building Co., already pays his 60 employees more than the required minimum wage. An entry-level laborer starts off earning $8 to $8.50 an hour and quickly earns a raise to $9.
“People need to make a decent living,” Thompson said. “People have a hard enough time getting by on $9 or $10 an hour.”