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Businesses cope with wage boost

An increase in the cost of running business is never easy during tough times.
Then again, it seems those two issues commonly appear together. Local employers and wage-payers who manage employees compensated at the federal minimum wage are dealing with that now as federally mandated wage boosts finish their push upward. With a new wage at $7.25 per hour, lower wage earners are likely going to appreciate the boost in their paychecks.
Concern about how the hike would impact employers, on the other hand, has been decidedly strong in the public sphere during the last couple of weeks. Politicians and experts have fretted the problem of what a pay raise during a period of decreased revenue growth would do to prices, employee rosters and even the delivery of goods and services.
Local businesses have been just as conscious of the issues that were coming down the line, and they went to work on solutions. Many took the opportunity open to make changes early, when the law was passed to mandate increases in 2007, 2008 and 2009. That simple step has had the mitigating effect of spreading the increases in the overhead that employers deal with over a period of years, making it less of a rude awakening in the current economy.
That is not to say that the experts were off base — increases in the cost of business do translate. Some local businesses have responded with incremental price increases, but there haven’t been any reports locally of big losses on the employment side of the equation.
The intent of the legislation that mandated this set of wage changes was not to cause burdens for employers or unmanageable costs for consumers. It was to lighten the burden of low-wage earners. We will keep hoping that the weight of the former does not outweigh the benefit of the latter.

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Posted by on Jul 28 2009. Filed under Editorials. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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