Beginning Tuesday, minimum wage employees will get a 10-cent per hour increase.
While an additional $4 per week may be a good thing for the employee, Lebanon Area Chamber of Commerce Executive Director Darrell Pollock wonders if businesses will increase prices or make do with fewer employees.
Beginning Tuesday, Missouri’s minimum wage will increase from $7.25 to $7.35 per hour. Businesses with gross sales over $500,000 must pay the increase, but those in the retail and service industries with annual sales less than $500,000 are exempt.
Businesses that have tipped employees must pay at least the equivalent of half of the minimum wage and make up the difference if employees’ tips do not equal what they would make in 40 hours.
“In essence, I think the tip person, either waiter or waitress, gets about a 5-cent raise out of this. Four dollars a week doesn’t sound very harmful for most people,” Pollock said.
Pollock, who is the outgoing 146th District representative in the Missouri House, said that legislators voted for the increase because costs have continued to rise as the economy has continued to struggle.
“My biggest thing is, things tend to have hidden costs in them. When you are in business, you have expenses go up,” Pollock said.
The Chamber’s members include restaurants that employ 30 wait staff. A fast-food restaurant may employ as many 80 to 100, with many of those being students, he said.
“You can factor that and say, ‘Now what does that cost?’ Even though it seems pretty minimal at 10-cents an hour, what do they do with those costs? They roll that back over,” Pollock said.
Businesses operating on a thin margin will have to decide whether to pass the increase in expenses to the customer, or cut back on labor.
“Well, then it’s counterproductive in my mind. Any time you have a forced cost like that, that’s the killer,” Pollock said.
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