Midlands fast-food servers and janitors are among 42,000 South Carolina employees who would earn an extra $70 per week before taxes if the minimum wage increase touted by President Obama happens.
But the raise, to $9 per hour from the current $7.25, likely would mean higher prices and fewer jobs as companies struggle to absorb it on top of the cost of new federal requirements for employee medical care, some Midlands business owners say.
The prospect of the first boost in the standard since mid-2009 is welcome to those on the low end of the pay scale.
“With the standard-of-living increasing, you need to keep up,” said USC student Thomas Creek, who worked for minimum wage as a part-time fast-food cook.
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Benny Clark, owner of four McDonald’s restaurants in the Columbia area, supports the raise even though it adds to his labor bill for his 200 employees.
“I’m not opposed to people making a living wage,” he said, adding $7.25 “is just going to carry people so far.”
Recent USC graduate Rebecca Krumel calls the proposal a mixed blessing.
She’s sympathetic to the idea, saying even the $10 to $12 per hour she earns working two part-time jobs makes it “pretty hard to pay all the bills.”
But the possibility of higher prices and more unemployment troubles her.
“For those who don’t make a lot of money, it sounds great,” she said. “But I don’t know if all employers can afford to do it.”
Some local business owners agree that the proposal would backfire, reducing hiring and forcing prices up enough to wipe out the benefit of the wage gain.
“The very people it’s supposed to help are actually hurt,” said S.C. Chamber of Commerce vice president Darrell Scott.
It will prompt some employers to turn more to automation, said Ben Homeyer, director of the state chapter of the National Federal of Independent Business.
“Raising the cost of labor raises interest among employers in technology and using less labor,” he said.
The focus instead ought to be on tax cuts for low-paid workers that “are going to put more money in their pockets,” he said.
At restaurants, a wage hike probably means unwanted increases in menu prices and fewer hours for part-time staff, some owners said.
“We’re scared to raise prices because business isn’t booming,” said Bobby Williams, chief executive officer of Lizard’s Thicket, a chain with 15 area eateries and 700 workers. “Every time gas goes up now, our cash register tightens up.”
Obama champions the wage hike as a way to provide more prosperity for middle-class Americans.
Jobs most likely to earn minimum wage are in food preparation, forestry, fishing, building maintenance and personal services such as maids, federal labor officials say.
The increase proposed would put a single person in most of the nation more than $7,500 above what federal officials say is the current poverty line of $11,170 per year.
Those earning the current minimum wage make $15,080 before taxes.
The wage hike proposed still would leave salaries so low in comparison with most workers that it “would not have a calamitous economic impact,” said Lawrence Glickman, a USC historian who has studied the topic.