Minimum wage hike likely to have some impact

GRAND RAPIDS, Mich. (WOOD) — The Michigan State Senate voted Thursday to raise Michigan’s minimum wage from $7.40 to $9.20 per hour by 2017.

The raise would be tied to inflation with a cap of $9.20.

Courtney Hunt, along with her mom and sisters, run Humanity Boutique in MoDiv, near downtown Grand Rapids.

They are now looking to expand their business, but have concerns about increasing the minimum wage.

“I think it is important to understand the impact of how much minimum wage is. And budget and look at ways to make that up in other areas,” Hunt said.

She says an increase would effect their business moving forward.

“We might have to step in a little bit, more as owners and take some of that time. Where as we might have an employee fill that spot, we might have to our-self. That is just kind of the reality of it.”

It could also mean a change in their pricing.

“I think it will increase product prices. There has to be a way to compensate for those losses we take in the budget for allotments for employment.”

She also says depending on what happens in Lansing could influence their decision on whether its the right time to grow the family business.

“It’s something we need to look at going forward. Can we as a small business afford to expand, afford to have that many employees? Its something we need to really calculate,” said Hunt.

Paul Sicilian, Associate Professor of Economics at Grand Valley State University, says employment is usually people’s biggest concern with a hike in the minimum wage.

“I think that peoples biggest concern on what the impact will be on employment. And the evidence is that it is very minimal. In fact, more recent evidence is finding almost no employment impact.”

Sicilian says we may see employers move towards an older more experienced workforce with the increase. And says the impacted industries are limited.

“It will impact service industries like restaurants and bars and some stores,” Sicilian said

He said any increase in everyday goods and services won’t solely be because of a raise in the minimum wage.

“The economic impact of the minimum wage, I think is greatly exaggerated. It seems to me its more of an argument for politicians to have. Its more an ideological argument more than an economic argument I think,” says Sicilian.

Still business owners, like Hunt, say every penny makes a difference.

“Looking at expansion, that will mean adding more employees for us. Adding more employees means adding more costs. If minimum wage goes up, than our employment costs go up in those wages we have to pay our employees.”

The bill still needs to pass through the state house and be signed by the governor before it becomes law.

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