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Minimum Wage Hike: Good or Bad For Utah?

President Obama's push to raise the federal minimum wage by almost two dollars per hour is being met with near universal approval from economists and citizens -- but not from everyone.
SALT LAKE CITY (ABC 4 News) - President Obama's push to raise the federal minimum wage by almost two dollars per hour is being met with near universal approval from economists and citizens -- but not from everyone.

During his State of the Union address last week, Obama identified the federal minimum wage as a key factor in improving the U.S. economy. Currently, the minimum wage is $7.25 per hour. Obama wants to raise that wage to just over $9 per hour.

Raising the minimum wage isn't always an economic booster, analysts say. But in the current economic landscape, most experts agree that raising the minimum wage to $9 would have overwhelmingly positive results -- largely because raises to the minimum wage in the past have consistently fallen behind the rate of inflation. That means that even though low-wage workers make $7.25 per hour in 2012, workers during the 1960s who made $1.25 per hour could buy more with their money because goods and services cost a lot less.

"Especially with taxes going back up, it's a bit harder. It definitely would make a big difference," said Felix McCann, who earns near minimum wage at a Salt Lake area tax preparation company. "It would help a lot of people."

Analysts generally agree that the federal minimum wage has lagged behind the cost of living, and that raising it now would almost universally benefit the U.S. economy. The last raise to the minimum wage occurred in 2009, from $6.55 to $7.25.

However, there are opponents to raising the minimum wage -- mostly from small business owners, who would have to pay more for their employees than they currently do.

"That's impossible, and not just me but for a lot of people because it's like a chain reaction," said Lily Wong, who owns a Salt Lake Valley cleaning service. "It means if you do that, then I have to raise my price to keep up with other supplies."

"It makes it harder for me to hire somebody," said Daniel Burton, owner of Epic Biking in Saratoga Springs. "I need people to help me, but... I can barely survive paying the current minimum."

Burton's and Wong's opinions reflect a long-held argument against raising the minimum wage -- that, while it unquestionably helps workers, it hurts small businesses far more than it hurts large businesses. Another argument against raising wages is that it could actually cause even more inflation, as businesses hike the price of goods to offset the higher cost of labor.

Any raise to the federal minimum wage would have to be approved by Congress, which might be a tall order given the Republicans' control over the House of Representatives. However, even some Republicans on Capitol Hill have voiced their support recently for a raise to the minimum wage.
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