The federal minimum wage is making news again.
In this year's State of the Union address, President Obama called for an increase in the minimum wage from the current $7.25 to $9 per hour. And recent legislation proposed in the U.S. House of Representatives went even further-pushing for a base wage of $10.10 per hour.
In Ohio the minimum wage, tied to the annual inflation rate, is currently 60 cents an hour higher than the federal minimum, which puts enough pressure on local small businesses that hire seasonal workers, according to Tom Witten, whose family owns and operates Witten Farm Market based in Lowell.
"We heard the State of the Union address, and our first thought was that it would be a major cost for our business," he said. "We hire about 100 seasonal employees every year, and a $9 minimum wage would represent a dramatic increase for us."
Witten said instead of paying higher wages, businesses may decide to cut back on employees and use the savings to purchase automated equipment.
"For example, every year we always hire people to pick green beans," he said. "But last year we invested $40,000 in a green bean harvesting machine, and that reduced the number of pickers by 10 or 20."
Higher wage proposed
President Obama has recommended that the federal minimum wage be increased to $9 an hour.
The current federal minimum wage is $7.25 per hour.
Ohio's minimum wage-tied to the inflation rate-is currently $7.85 per hour.
At least 10 other states are currently considering tying their minimum wage to the inflation rate.
Source: The Associated Press
Most businesses operate on a very small profit margin, Witten said.
"And as a small business we can't afford to lose money year after year," he said. "And as business costs go up, the price of products also have to go up."
Mike Bishman, owner of Professional Pool Management which contracts to manage several area municipal swimming pools every summer, agreed.
"We have a fixed rate that we charge each municipality to manage their pool facilities," he said. "We pay our staff a wage, then the cities pay us to cover that cost. So increasing the minimum wage would have more of an impact on those towns that may have to bump up their admission rates to cover a wage increase."
Bishman said many municipalities are already struggling to keep their pools open every summer.
"This would just be another hurdle they would have to overcome, and some would have to close," he said.
Professional Pool Management was recently approved to manage the Marietta Aquatic Center for the 2013 and 2014 seasons.
"We have 22 staff members, and not all of them are paid the minimum wage," Bishman said, noting that some of the more experienced staff are paid a higher rate to attract them back every year.
"If a supervisor is already making $9 an hour and the minimum wage is increased to that amount, I'm going to have to bump them up to $10 or $12 an hour," he said. "So this not only affects the minimum wage staff, but the rest of my staff, too. It's very disconcerting."
On March 15 a bill to raise the federal minimum wage even higher-to $10.10 per hour was defeated in the U.S. House of Representatives by a 233 to 184 vote.
The legislation would have gradually increased the minimum wage over a period of three years, and included language to continue wage increases annually after that. The proposed measure would also have provided for an increase for workers who receive tips on their jobs. The federal minimum wage for those employees has remained at $2.13 per hour for the last 20 years.
Congressman Bill Johnson, R-Marietta, was among those who opposed the legislation.
"I, too, want hardworking Americans to see an increase in their take-home pay," he said. "But, while well-intentioned, history shows that when the federal government forces small business owners to pay their employees a higher wage than they otherwise would, small business owners are then forced to reduce work hours or layoff some employees to pay higher wages to others-hurting those that supporters say they were trying to help.
"Businesses up and down the Ohio River tell me that high taxes, federal regulations, and government red tape are keeping them from hiring and expanding," Johnson added. "The best way to create jobs and increase take-home pay for families is to stop the federal government from taking more, get government out of the way of America's job creators, and get our economy moving again."