SALISBURY, Md.- Among the highlights of President Barack Obama's State of the Union address was a proposal to increase the federal minimum wage. It would boost wages from $7.25 to $9 per hour. The president said the move would pull millions of Americans out of poverty and help the economy, but not everyone agrees.
Locally, some people we spoke with said the increase is needed, so workers can make a living and keep up with rising costs. However, others worry about the impact on small businesses, and say the job market may suffer.
Inside the kitchen at Vinny's La Roma restaurant Wednesday, prep work was under way for the dinner crowd. Owner Vinny Bellia said times are tough for small businesses like his, and increasing the minimum wage will only make things worse.
"You can't hire more people, the tax is going to go up. You just can't do it anymore. A lot of places are closing up because of that. Especially when it goes up to $9, there will be more people closing up."
Memo Diriker, with Salisbury University's Perdue School of Business, said changing the system will yield winners and losers.
"Obviously, it's going to benefit those who are the recipients of minimum wage," he explained. "It's going to enable them to spend more, which has some positive effects on the economy. But the people who are employing them are going to have to adjust to a new reality. They're going to have to find that money."
People we spoke with are mixed about the proposal.
"I think it's great," remarked Trey Kleman of Salisbury. "I think a lot of like hourly workers, you know, there's a lot of jobs where people really don't get paid enough for the amount of work that they do."
"It would be good if people who wanted to work could be paid more, and yet at the same time, I know that small businesses are closing around here, so that could be a hindrance for them," said Margo Nolan.
Diriker said while the jobs market may be hurt in the short term, it all evens out in the end.
"Usually within a year, its effects dissipate in the economy and everybody gets used to the new reality and they adjust their prices, their services and their employment systems, and it comes to pass."
The president's proposal would raise the minimum wage by 2015, in a series of stages. That would be followed by an increase every year based on inflation.
Tuesday, May 21 2013 8:15 AM EDT2013-05-21 12:15:54 GMT
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