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Augusta area business owners fear proposed minimum wage increase

Employers say move will hurt employment

Friday, Feb. 15, 2013 6:09 PM
Last updated Saturday, Feb. 16, 2013 2:16 AM
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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.”

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concercitizen
733
Points
concercitizen 02/15/13 - 07:41 pm
9
6
What Obama supporters do not

What Obama supporters do not realize is that this will hurt the economy, and will not help anyone. Prices will go up on everything, gas, groceries, clothes,This, along with ObamaCare will doom America as we know it.

my.voice
5156
Points
my.voice 02/15/13 - 09:53 pm
8
6
@concernedcitizen: the Feds

@concernedcitizen: the Feds are doing this to keep the power. Inflation is a good thing for the democrats. It keeps people hooked on government dependency. The day that the US Supreme Court held Obamacare constitutional was a nail in the coffin of our freedom. It will, repeat, will drive private insurance companies out of business and tax the guts out of everyone. I just hope those who campaigned for it don't end up needing surgery, you won't be able to get it, well, depending on your voting record I guess. And yes, that's where this is all going.

Herenow2say
107
Points
Herenow2say 02/15/13 - 11:21 pm
7
10
Repeat repeat repeat

This comes up everytime a minimum wage hike is brought up. It's never causes a catastrophe because 1) 1% of Americans or less actually make the minimum wage and 2) people at the level of the economy live hand to mouth and pump that money right back into the economy, sustaining demand and increasing the need for, you know, more jobs.

Dixieman
17202
Points
Dixieman 02/16/13 - 01:26 am
10
8
2000000 POINTS

duh. EVERY economist will tell you this is a bad idea and causes jobs to vanish.
Don't believe me? Well, if raising the minimum wage to $9.00 is a good idea, let's really solve things and make it $50 per hour! Now use your logic and think through the consequences of that idea. What would a business do? Hire more workers at that level? Stop hiring? Actually have to let people go? It's just a matter of scale, and going up to $9 would have equally bad effects. And raising it hurts minorities most! Thanks, Obama, you economic ignoramus and half-wit.

downie
10
Points
downie 02/16/13 - 06:06 am
8
5
27 cent per hour raise for the Government!

The IRS collects 15.3% FICA taxes (Social Security & Medicare) on every dollar of payroll. Half of that is paid by the employee (.0765%) and the other half paid by employers. If the minimum wage goes up $1.75 per hour the IRS collects an additional 27 cents per hour for every hour every employee works. Do the math!

Radwaste
420
Points
Radwaste 02/16/13 - 06:47 am
11
4
You aren't aware, really.

What a minimum wage hike REALLY does is devalue the dollar.
It does this by making dollars worth LESS per hour of labor.

This idea should make you gasp with amazement, as it is the reason textile plants are closed in the USA and illegal immigration is so rampant.

The same people who print the money have just told you it should be worth less, and that blows right by you because you think you're "getting something".

americafirst
1001
Points
americafirst 02/16/13 - 09:03 am
6
3
Herenow2say

You clearly don't understand economics much like our president. That exta pay does not materilize out of thin air. Either the employer makes less money and therefore spends less or prices are raised resulting in a wash. No extra stimulous to the economy. What I haven't heard or read is how this is mostly for the unions. Union contracts all provide that the minimum union wage is X dollars above the federal minimum wage. Therefore most every union worker will get a raise. Obama never stops paying off those that support him.

LuvMyTown
2009
Points
LuvMyTown 02/16/13 - 09:19 am
6
1
Kudos to Hiram Thompson

He pays his workers a wage that keeps them above the poverty line. His business seems to be thriving. Fair pay has its rewards.

Little Lamb
48829
Points
Little Lamb 02/16/13 - 09:43 am
5
2
Demolition

I think Thompson Wrecking is a good company. But, let's face it, much of their work comes from City of Augusta contracts (for example, they got the demolition contracts for the new Marriott parking deck and the TEE Center, both paid for by taxpayers). Thompson Wrecking's dependence on government contracts skews their thinking and their business model. They have learned that they can low-ball the competition in the bidding process because City Administrator Fred (What, me worry?) Russell will rubber stamp any and all change orders they submit; thereby ballooning city payments far above the original bid.

The other entity that contributes much to Thompson Wrecking's bottom line is the Richmond County Board of Education. RCBOE is not known for being efficient nor judicious in its spending habits as well.

JRC2024
10381
Points
JRC2024 02/16/13 - 10:27 am
4
0
LL you need to look around at

LL you need to look around at the signs of Thompson Wrecking on alot of other sites than the BOE. I just finished a job and he was the person doing the removal of the tranzite material. I see him everywhere and that is good. Hiram is a good man and runs a good company. All of my employees are paid by the amount of work they do. They set their own hourly wage. If they choose to work slow their wage is less. If they choose to work longer hours their wage is more. Some make more than others because they work smarter. Most average more than $11.00 per hour. Thursday one husband and wife installer averaged $42.85 per hour.

dwb619
103720
Points
dwb619 02/16/13 - 10:34 am
3
0
union wage

I am interested in what unions wages are tied to the federal minimum wage.

itsanotherday1
48147
Points
itsanotherday1 02/16/13 - 11:27 am
3
0
Milton Friedman

This is an old video, but still appropo to the discussion of minimum wage and what it does to low skill workers.

http://www.youtube.com/watch?v=eg4fxUpRzj8

Little Lamb
48829
Points
Little Lamb 02/16/13 - 11:44 am
4
2
Inflation

Concerned Citizen's first post up above says it very well. Inflation is the inevitable consequence of the multi-trillion deficits run up in the past seven or eight years. That inflation will crush the savings of senior citizens.

By the way, how often have you heard Obama talk about senior citizens in ways that might hint he cares about us as much as he cares about "the middle class" or "the chi-i-i-i-ildren" or illegal immigrants or college students or public school teachers or union workers? He is prepared to throw us under the bus because he is envious of our savings accounts — accounts that took forty years of hard work to accumulate. But since we've got social security checks to support our basic needs, he is entitled to take our savings through the insidious tax of price inflation. It has already started, but today's inflation will pale into insignificance when the piper must be paid.

PassingOnBy
369
Points
PassingOnBy 02/16/13 - 12:06 pm
2
4
Union wages, redux

"americafirst", I don't know of a single union contract (and I've negotiated many) that dictate the lowest wage for a union member is "minimum + $X". I do know that they generally require that the workers (union or not) cannot be paid LESS than federal minimum in a shop where there IS a union. They also state that, if a state minimum wage is higher (as it is in several states), the state wage must be used as the base.

Unfortunately, there are fewer and fewer wage protections for the workers here in Georgia. The wrong-minded twin concepts of "Right to Work" and "At Will" have combined to depress wages more than anything else when it comes to paying a worker a decent salary for a honest day's work.

Sad thing is, most of the people invoking the unions as bad things ALL benefit in some way from the efforts of those same unions over the last 100+ years. You don't like them? Give back everything you ever got in the way of perks due to the labor laws they got passed.

americafirst
1001
Points
americafirst 02/16/13 - 12:42 pm
2
0
POB: Then i stand corrected.

POB: Then i stand corrected. i just remember that being brought up in the debate the last time the minimum wage was raised.

PghSteelersFan
141
Points
PghSteelersFan 02/16/13 - 12:52 pm
2
0
The City of Santa Fe, New

The City of Santa Fe, New Mexico has had a 'living wage' law since the early 2000's. At first it covered companies with 25 or more employees but it has since changed to cover all companies. It is automatic each year unless the City Council stops it, which it has in the past. For the past two years, they haven't stopped the automatic jump and on March 1st the living wage will be $10.54 per hour. Second only to San Francisco. During the recession a few businesses closed but most of them were mismanaged from the start. Those who had a good business plan are still around. The cost of living in Santa Fe has always been high because it is a 'tourist destination' city and also the State Capital which has a huge number of higher paid employees.
The living wage gives citizens who don't work for the State the little extra boost they need to be able to live in Santa Fe.
Prices while higher on some items are balanced by New Mexico not charging gross receipts (sales) tax on food or clothes.
The unemployment rate for the City of Santa Fe is 4.6% down from 6% a year ago when the first living wage jump in two years was allowed which took it to $10.29.
Businesses have actually begun hiring employees as the recession ends and tourists come back.

Jack T
121
Points
Jack T 02/16/13 - 02:53 pm
2
4
Ten years ago I had a job
Unpublished

Ten years ago I had a job that paid $9/hr and even then I needed a second job to cover only my expenses. I couldn't imagine if I had a family to support.

A decade later with added inflation and higher living costs even $9/hr is still not nearly enough to cover expenses in most places. Keeping the minimum wage at $7.25/hr is not only insulting, but hurts those making that wage as well as our economy and the nation as a whole.

Those making the bare minimum are usually the ones working the most unpleasant and grueling jobs. They work hard to make what they can, and even then sometimes need more assistance. Then when they need more assistance they are scoffed at by the very people who refuse to pay them more.

It's a sick and twisted game where people are played and paid next to nothing and expected to be happy just to be employed. What happened to valuing a hard days work, as well as respecting those who do the hard work to supply your record profits?

What do we do instead? We write legislation to further benefit the top instead of the bottom and the middle.

It's sick and unethical.

Jack T
121
Points
Jack T 02/16/13 - 03:26 pm
3
2
‎"If people want to make
Unpublished

‎"If people want to make more, tell them to go to school! Tell them to get a skill! Tell them to stop being lazy! Tell them to stop feeling entitled!"

Okay...

A.) School isn't free and with our current system, especially the online for-profit scam schools, people are left in six figure debt when they are done.

B.) Even those who have gone to school, even graduate school are not paid nearly what they should be paid, and many are left with next to nothing at the end of the month after living expenses and loan payments.

C.) Those working minimum wage are not lazy... I can guarantee you wouldn't want to do what they are doing, but they do it because they have to. If you think cashiers or waiters at restaurants have it easy waiting on you then you've clearly never worked in the industry or have no sense of sympathy or empathy.

D.) Who's entitled? Those who do the hard work at the bottom who struggle to get by and provide what little they can for their family? Or perhaps those on the top who swim like Scrooge McDuck in their record profits then ask for bigger tax breaks and corporate welfare subsidies worth BILLIONS?

Wake up. If you have heard yourself uttering the words at the top of this post congratulations, you have blindly become a pawn in the game of greed this country has successfully legislated into existence. I hope you're at the top, because if you're not... buy some bandages for your self-inflicted wounds.

burninater
9921
Points
burninater 02/16/13 - 04:19 pm
3
3
Hiram Thompson, the owner of

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.”
---------

This guy gets it.

If you have a business that does not include a living wage for your employees, you are not running an independent business. You are in fact running a taxpayer-subsidized enterprise, and pocketing the difference.

How so? Guess who makes up the difference when those people who don't make enough money to afford health care have a medical emergency? And then guess who puts that taxpayer-funded shortfall, maintaining his/her healthy workforce, directly into his/her private pocket?

A business that cannot create jobs that generate living wages is a parasitic enterprise.

The irony is that there are countless successful private enterprises in the U.S. that have noone in their organization making as low as minimum wage. Minimum wage rate employees, when minimum wage is below a living wage, are as much an indictment of their employer, and his/her business model, as they are the employee.

dwb619
103720
Points
dwb619 02/16/13 - 04:46 pm
4
3
Burn @4:19

That's one of the reasons I don't do Wal-Mart.

WeAreAllInfected
111
Points
WeAreAllInfected 02/17/13 - 08:07 am
1
2
Dixieman is right.

Lets end all poverty and make minimum wage $24/hr. Ridiculous right? About as ridiculous as saying raising the minimum wage from $7.25 to $9 will end any poverty.

Hiram Thompson doesn't get it. An increase in minimum wage is a decrease to his employee's pay.

"1% of Americans or less actually make the minimum wage" - this may be true but cost of this increase will be passed along to all consumers... Who hasn't gone to a gas station, grocery store, or fast food place in the last 30 days.

itsanotherday1
48147
Points
itsanotherday1 02/17/13 - 11:21 pm
0
2
Minimum wage is just more

Minimum wage is just more welfare. Those additional costs are passed through to consumers; which indirectly has them paying another tax to the least qualified.

As stated above, if $9 is good, why not make it $12 or $15?

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