Minimum wage referendums are on Tuesday's ballots in Alaska,
Arkansas, Illinois, Nebraska and South Dakota, where minimums range from $6.25
to $8.25 an hour. Some small business owners say raising the minimum wage will
force them to cut employees' hours or jobs. Higher minimums were already
approved this year in 10 states, the District of Columbia and Seattle.
Ken Jarosch thinks he'll have to raise prices and hire fewer
part-timers for his Elk Grove Village, Illinois, Jarosch Bakery if the state's
minimum rises. Illinois' referendum is non-binding, giving the state
Legislature the voters' opinion on the measure. Jarosch's costs would rise
about 5.5% if the wage rises from $8.25 to $10. He has about a dozen high
school students earning minimum wage out of his staff of 60.
Companies are more likely to raise prices than cut jobs.
Thirty percent would pass along an increase to customers, according to a May
survey by Pepperdine University's Graziadio School of Business and Management.
Fourteen percent said they'd cut hours and nearly 12% said they'd lay off
An upward trend
While 10 state legislatures voted to hike the minimum wage
this year, it rose in 11 others because of inflation. And President Barack
Obama in February ordered companies with federal contracts to pay at least
$10.10 an hour.
Seasonal workers at Rick Poore's Lincoln, Nebraska screen
printing and embroidery company earn the minimum wage. Tuesday's referendum
could raise the state minimum from $7.25 to $8 on Jan. 1, and another $1 in
Kristin Kohn voluntarily raised the minimum wage at her
Indianapolis gift shop, Silver in the City, to $10.10 an hour when Obama signed
an executive order on federal contractors' pay. She previously paid workers
Support, with limits
Eighty-one percent of small business owners who pay hourly
wages pay above the minimum, according to a survey by The Hartford. Two-thirds
of those owners support raising the federal minimum.
But as much as some owners believe the minimum wage should
rise, higher rates pose a challenge. Andy Carlson budgets each year for a
higher minimum wage because Colorado's minimum, now $8, rises with the cost of
living. About five of the 60 staffers at his two Ace Hardware stores in Denver
earn the minimum. He believes the minimum should rise along with inflation, but
he's concerned about the calls for $10.10 per hour. That big an increase may
lead him to not hire as much.
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