Locals weigh in on other states raising minimum wage

Some worry small businesses could be impacted

With New York and California are planning to raise minimum wage to $15 an hour, a local economy expert and business discuss the implications.

Manager of Polito’s Pizza in La Crosse Josh Harky worries such a change in Wisconsin would make it hard for them to keep up as a small business.

“It’d definitely increase the price of our pizza and then we’d probably have to cut hours from other people,” he said. “So it would affect us and then definitely affect our customers.”

The UW-La Crosse Chair of Economic Department, Taggert Brooks, said there are pros and cons to raising minimum wage.

“I think there are people that will see their wages rise, and for them it’s a positive thing,” he said. “I think there’s also a concern about businesses not being able to afford that increase, and therefore having to cut back on employment.”

Brooks said recent research suggests that loss of jobs with increasing minimum wage is not as high as economists once thought, but it’s uncharted territory for a statewide hike to $15. He said to make raising the minimum wage work, changing slowly is the way to go.

“Having some phase-in is important, particularly when you’re making such a large change. It allows everybody to sort of gradually adapt to that new rate,” he said.

Harky said a slow change is preferable, but he’s still not sure it’s the best thing for business.

“I think maybe [by] implementing it a dollar a year, see how it goes … it’d be a little easier,” Harky said. “I don’t know if it’d be great for us, but it’d be a little more helpful than just jacking it up all the way.”

Brooks said a small change in minimum wage doesn’t affect the economy all that much. According to him, the biggest change is seen in rural areas where there is often a bigger gap in current wages compared to the new minimum wage.

“When the rural parts of the state that don’t have high costs of living experience a very large increase in the minimum wage, they’re likely to experience maybe a little bit more of that dis-employment effect,” he said. According to him, a result may be  “businesses substituting where they can equipment instead of people.”

California and New York have different ways of implementing the change, but both will be phasing it in over the coming years and giving small businesses more time to adapt to the change.