Businesses react to possible wage hike

FORT WAYNE, Ind. (WANE) President Obama gave his State of the Union address Tuesday night. His push to boost the federal minimum wage is likely the proposal that’s getting the most attention.

“Even in the midst of recovery, too many Americans are working more than ever just to get by, let alone to get ahead,” said President Barack Obama in his State of the Union Address.

Tuesday night, President Obama asked Congress to raise the federal minimum wage from the current rate of $7.25 an hour. Although he didn’t mention a specific number, in the past he has said that rate should be $9 an hour.

One local businessman doesn’t think that’s a good idea.

“It’s detrimental to all the small business in this country. my payroll taxes go up, the insurance that I pay for the business goes up, there’s just a number of things that a lot of people don’t think about,” said Bryce Fox, Owner of Arena Bar and Grill.

Fox fears that other small businesses won’t be able to afford to pay that.

“Instead of having five people working, they’ve got three, so if it gets busy, there’s not enough people to keep up the demand for customers, it’s just going to put them out of business,” said Fox.

“We think it’s unrealistic, it sounds good, I think it defies logic,” said Barbara Quandt, Indiana State Director of the National Federation of Independent Business (NFIB).

Officials from the NFIB have the same worry: fewer jobs, particularly for teenagers, who make up most of the minimum wage population.

“The minimum wage was never intended to be a full time wage for families. It was meant to be a training wage, so basically you’re going to lose jobs for lots of teenagers, people will more likely be inclined to hire an older worker, more mature with more experience,” said Quandt.

Quandt said most people making minimum wage live well-above the poverty line and gain pay raises within the first year of employment.

It’s not clear when or whether Congress will actually take a serious look at raising the minimum wage.



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