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Minimum wage increase likely to raise all wages
By Kristen Poland
Staff Writer
Businesses around South Carolina aren’t fretting too badly about the federally mandated minimum wage increase that raises the minimum wage more than $2 over the next two years.
The new law increased the minimum wage from $5.15 to $5.85 on July 24, and then it will raise it to $6.55 on July 24, 2008, and finally to $7.25 on July 24, 2009. The increase is the first in 11 years.
Thirty states have state-mandated minimum wage requirements that are higher than the federal minimum wage. South Carolina is not one of those states, but many businesses across the state say they voluntarily pay their employees more than the minimum wage and thus do not expect to be immediately affected by the upcoming wage hike.
“You can walk up to any fast food restaurant and they’re paying their employees more than $6 an hour,” said Tom Sponseller, president of the South Carolina Hospitality Association.
“Most of the people that will be hurt by this law are the very small mom and pop operations.”
Marion Edwards, director of communications for the S.C. Department of Parks, Recreation and Tourism, said of its hundreds of employees across the state, including seasonal employees, only about a dozen make minimum wage.
“We are in a competitive market, so we pay our employees a wage that’s higher than the minimum,” Edwards said.
Similarly, the Charleston County Parks & Recreation Commission sets its minimum wage at $6 an hour to remain competitive with other local employers, including hospitality, service and retail. This rate is generally paid to the 100-200 seasonal and part-time employees.
Jan Coulter, human resources director for the CCPRC, said while the commission won’t be affected by the 2007 increase, the 2008 and 2009 increases not only will require the commission to increase its wages, but also will affect the commission’s ability to maintain a starting hourly wage that is above the federal minimum.
“We’re going to need to go back to what we did years ago, which was to slowly increase our wages to well over the federal minimum in order to be competitive with the restaurants, retail and other seasonal employers in this area,” Coulter said.
“Now we’ll need to go back and start that process all over again.”
In addition, Coulter said even with the minimum wage increase, higher wages will likely increase in a relative manner.
“Once you increase the minimum, you’re looking at having to raise wages across the board,” Coulter said.
“When you start breaking down everything into an hourly wage, some of your part-time salaried employees won’t be making much more than what the minimum wage will be after the next few stages.”
Jay W. Ragley, S.C. state director for the National Federation of Independent Business, said that although business owners he’s spoken with about the issue are disappointed about the minimum wage hike, they are not surprised.
“This issue has been on the table for quite some time, so while our members are not very happy about it, we all knew it was coming,” Ragley said. “While there is some tax relief included in the bill to help small businesses cope with increased labor costs, it’s only about half of what NFIB called for.”
Contrary to Sponseller’s assertion that restaurants aren’t going to feel much affect from the minimum wage increase, Ragley said the new law will have an affect on the hospitality and service industries.
“I think this will affect hiring decisions, particularly in the service industry,” Ragley said.
“Instead of hiring more workers, a lot of businesses will try to keep their turnover low and increase the work load of current employees.”
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