Minimum wage increase hits Friday

Published 8:05 am Wednesday, July 22, 2009

FRANKLIN—Millions of workers in the District of Columbia and 30 states, including Virginia and North Carolina, are gearing up for a pay raise on Friday. That’s the day that the federal minimum wage increases to $7.25 per hour from the current $6.55 per hour.

Friday’s increase is the final step of the Fair Minimum Wage Act of 2007. The law increased the minimum wage in three steps starting in 2007 from $5.15 per hour to $7.25 per hour.

John Smolak, president and chief executive of Franklin Southampton Economic Development Inc., said that he didn’t know how many people in the area would be affected by the increase but that it would have both positive and negative effects.

“Obviously, it’s going to have a very positive effect on those minimum-wage earners who probably need a boost in their wages to keep surviving in today’s economy,” he said. “It will somewhat hurt the retail sector and the food service sector and other businesses that have low margins to maintain a profitable status.”

Steven Dail, the store manager at Dail’s Home Center True Value in Franklin, said that he has about four employees who will be affected by the increase, but they are all part-time employees that are high school or college students.

“Most of my workers have been with me for a long time and make more,” he said. Dail said that his employees that are affected by the increase wouldn’t see a substantial raise, only about 25 cents an hour.

“I’ve got no problem with it,” Dail said about the increase in minimum wage. He said that the extra expense for his business is so small that it won’t be passed on to customers, but he wasn’t sure if that was true for other businesses.

“As a whole, it’s going to be a trickle-down effect,” he said. “It will increase the cost of business, and that will increase prices.”

Some businesses, like the Golden Skillet restaurant on Armory Drive in Franklin, say that the increase in the minimum wage isn’t an issue.

“It doesn’t affect us at all,” said Dan Shull, the manager at Golden Skillet. “I start them out way above minimum wage.”

Although it could lead to higher prices for consumers at some businesses, Dail said that putting more money in the pockets of workers would be useful, especially given the current economic recession. He said that the effects of the economy have been the biggest challenge to his business.

“Hopefully, it’ll put a little more money in the economy,” he said.

Twenty states and the District of Columbia already have minimum wages set higher than the federal minimum wage.

However, legislation in the District of Columbia requires that its minimum wage be $1 over the federal rate, so its current minimum wage of $7.55 will increase on Friday.