Business Owners React to Proposed Minimum Wage Hike

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JIM THORPE -- Employees under new federal contracts could soon see an increase in their pay checks.

President Obama has used an executive order to increase the minimum wage almost $3 an hour for those workers.

Small business owners believe a more widespread wage hike could soon be hitting them.

Michael Guy is the co-owner of Rainbow's End in Jim Thorpe, where he serves lunch and sells candy. Some of his workers earn minimum wage. Guy worries that if he has to pay them more, it could hurt business.

"They should protect us small mom and pop shops because, quite frankly, we'd cut our hours before we could hire people," said the co-owner.

Guy said things such as workers comp, health insurance and liability increase the cost associated with each employee.

"If you raise that up, instead of paying $10 an hour you're paying $15 an hour. This shop can't afford $15 an hour. "

Guy believes if minimum wage workers receive more money, he would have to give everyone a little extra.

"If you raise them, then you should raise the people that are at that rate already and that can be quite devastating," said the co-owner.

Not everyone in the small business community agrees though. The co-owner at Crazy for Closeouts says he'd love to help those people who are struggling while making minimum wage.

"Your average family is trying to put oil in their tank, or whatever their heat is, food on the table and pay for the car insurance and gasoline. By the time they're done with that, there's no income left," said Andrew Paterson, the co-owner of Crazy for Closeouts, a thrift shop in Lehighton.

Paterson said he can't afford new employees right now, but believes increasing the minimum wage could create new jobs and better opportunities.

"I've performed jobs that paid me minimum wage, but required a college education and there's something wrong with that picture," said Paterson.

For now, minimum wage in Pennsylvania remains at $7.25 an hour.

As for the wage increase for those federal workers, that won't take effect until 2015 at the earliest.

It also does not affect existing federal contracts.

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