Friday, July 27, 2007
News
07/29/07 NEWS3: More money per minute
More money per minute
Minimum wage hike takes effect
By Colby Dunn
Time is money—it’s an adage that’s been
thrown around by ambitious business people for years. But now, time is
going to me...
Wal-Mart employees stock items at a Chicago store. More than 15,000 people applied for the 490 jobs offered. Most were minimum wage.
CREDIT: Tim Boyle/Getty Images |
More money per minute
Minimum wage hike takes effect
By Colby Dunn
Time is money—it’s an adage that’s been thrown around by ambitious business people for years. But now, time is going to mean considerably more money for low-wage workers around the country.
The minimum wage, which has been holding steady at $5.15 since its last increase in 1997, made a 70 cent jump to $5.85
on July 24. The increase is the first of three wage hikes that will go into effect every
July 24 until the wage lands at $7.25
in the summer of 2009.
Georgia, which has a broader base of low-wage workers than other states, is one of 20 states that had not already passed a minimum wage increase of its own when the federal increase was passed into law. According to the U.S. Bureau of Labor Statistics, Georgia claims 2.7 percent of the nation’s workforce, but represents 3.4 percent of minimum wage workers. In 2005, at least 66,000 workers in Georgia toiled for minimum wage or less. Those who are full-time employees will see an annual pay raise of nearly $1,500 thanks to this year’s increase.
Opponents of the plan, however, say that it will impose a heavy burden
on small businesses that may not be able
to afford the extra payroll expense. The rate hike will eventually affect 13 percent of Georgia’s workforce.
“Our labor payroll will go up,” says Jennifer Newell, spokesperson for Amici Italian Café, which is headquartered in Madison and operates four restaurants across the northeast corner of the state. According to Newell, only about 50 of
the company’s workers will benefit from this year’s increase because they now earn minimum wage, but a much greater proportion of the paychecks of the company’s almost 200 employees will
be boosted in the coming years because they make more than the current minimum wage, but not quite the 2009 figure
of $7.25.
Some businesses have been planning ahead, hiking their own pay rates before the government raises it for them in an effort to give themselves more time to offset the increasing costs. Many small businesses are not following that trend, however, and Amici is among them.
“We’re just going to wait until they come around,” says Newell of the upcoming increases.
By 2009, the $2.10 total jump will
mean full-time minimum-wage workers
will be pulling down an extra $4,368 a year.
That’s enough to buy 1,400 lattes, two new computers, half a year’s rent for a modest two-bedroom apartment or more than 6,000 cans of tomato soup.
That money isn’t just going into the pockets of teenagers with after-school jobs, either, which is a common misperception about minimum-wage workers. Nationally, about 84 percent of minimum wage earners are over the age of 20. More than a third, 34 percent, are parents.
According to the Georgia Budget and Policy Institute, the minimum wage has long needed a boost, especially since it has continued to lose value over the last few decades thanks to rising costs of living everywhere in the country.
But some economists fear that in the long run, the rate hike will hurt more than it will help. Many small businesses are already struggling in an attempt to provide health care for their employees. In 2006, approximately 61 percent of employers provided coverage, down eight percent from 2000, according to the Kaiser Family Foundation. About half of uninsured employees work for businesses with fewer than 26 employees. Opponents claim the new wage mandate will force more businesses to drop their health insurance—
or close altogether.
According to the National Federation
of Independent Business, 80 percent of Georgia’s small businesses oppose an increase in the minimum wage, which may explain why Georgia wasn’t among the states upping their pay rates before the idea went federal.
However, thanks to Congress, the extra money is here to stay, and for low-wage workers, it means that their time will soon be worth more than ever before—by 2009, up to 12 cents more per working minute. SP