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Minimum wage hike: Help for some, problem for others

By Kandra Kent
Published On: Jan 02 2013 10:33:35 PM CST
Updated On: Jan 04 2013 12:55:59 PM CST

NewsChannel 21's Kandra Kent speaks with Pilot Butte Drive-In manager and an economics professor about how minimum wage impacts the economy.

BEND, Ore. -

Oregon minimum-wage earners had more than a new year to celebrate on Jan. 1. With 2013 came a 15-cent-an-hour raise.

Wages are now $8.95 an hour--the second-highest minimum wage in the nation--just behind Washington state.

But not everyone thinks it's good news.

Pilot Butte Drive-In Manager Andy Wilson said Wednesday raising minimum wage is a mistake.

All of his employees make more than minimum wage, but it's all about the cost of goods.

"The price of goods and services for every small business is going to go up, small and big businesses," he said. "Our bread prices will go up, our meat prices are going up. All of the products we buy are going up."

Wilson said last year's hike in minimum wage forced him to pass along the costs to customers and raise food prices.

But he hopes to avoid that this year.

"We're actually absorbing the costs this year, at least for now, and it's troublesome," Wilson said.

And by saving money for people in the booths, it is going to impact those behind the counter.

"As far as giving raises, we're not going to be able to do that as much as they deserve it," he said. "We're not going to be able to give out raises, and myself included."

And the small increase doesn't mean making ends meet is any easier for many minimum wage earners.

"I think it should go up more because its expensive to live in a house," said COCC student Mollie Martin. "What we have is a three-bedroom, and our minimum wage doesn't even cover living in the house."

Tom Carroll teaches economics at COCC.  He said with Oregon's slow economy, it's bad for business that the minimum wage went up, as it discourages expansions and hiring.

But an average minimum wage worker working 40 hours a week will make about $312 more a year. And Carroll says with that extra money, that person may decide to eat out at a restaurant like Pilot Butte Drive-In more often.

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