The impact on businesses if the minimum wage increases

Raising the minimum wage is a hot topic in Washington, D.C. and across the nation.

President Barack Obama is supporting congressional democrats’ proposal to raise the minimum wage to $10.10 an hour to match inflation.

It’s more than a dollar higher than the $9.00 proposal he made in his State of the Union address in February.

At The Cellar in Ammon, a local restaurant that’s been in business for nearly a decade owner Scott Hinschberger said raising the minimum wage for his 23 employees would be a big deal.

“If we have to deal with it, it’s not us that pays for it. It’s the customer,” said Hinschberger

He said menu prices will go up

“We’re already perceived as an expensive place even though we are not so to go higher could be tricky for us,” said Hinschberger

According to Hinschberger, if the minimum wage was raised to $8.50.

“I’d need to bring in an extra hundred dollars just to break even with where I am now,” said Hinschberger.

Up the street at Geraldine’s, owner Jay Bungard remembers when he started his first job being paid minimum wage.

“I remember when I started it was like $2.35 an hour, and of course gas was 67 cents,” said Bungard.

Now with 30 employees and wages ranging from $7.25 to $12 an hour, Bungard agrees with Hinschberger that his customers will have to foot the bill if it goes up.

“If you increase the minimum wage to $10. That’s going to affect the cost of goods sold, because I can’t absorb that cost.”

Bungard says most of his employees are high school students or people supplementing their incomes.

“With the last minimum wage increase I had to cut back on the employees I had and the employees that were left had to do more. So it’s like anything else you have to do more with less,” said Bungard.

Hinschberger said starting at minimum wage gives employees an incentive to work hard and climb the ladder.

“You start at minimum wage and you try and work your way beyond that. I know that’s not easy for some people but I think that’s the process of going to work,” said Hinschberger.

Idaho’s minimum wage is $7.25 an hour which equals an annual salary of $15,080.
The $10.10 increase would equal an annual salary of $21,008.

California has the country’s highest minimum wage at $10 per hour.