• August 23, 2014

Local business community divided on raising minimum wage

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Posted: Thursday, February 14, 2013 4:30 am

President Barack Obama proposed raising the hourly minimum wage from $7.25 to $9 by the end of 2015 in his State of the Union address Tuesday night.

Members of the local business community are divided on the issue. For some of them, a higher minimum wage means a better standard of living for laborers.

For others, the idea of raising the minimum wage is something that would devastate the business community.

“I think it would be great to raise the minimum wage because it is all about being able to take care of the family,” said Marcus Carr, director of the Central Texas Business Resource Center. “But on the flip side, it could make it difficult for some businesses that are already struggling to make payroll.”

Greater Killeen Chamber of Commerce CEO John Crutchfield offered a less diplomatic analysis.

“I think it would just kill jobs and raise costs,” Crutchfield said. “If you do that, minimum-wage jobs will diminish.”

Waco-based economist Dr. Ray Perryman said the issue is too nuanced to simply be broken down to “good” or “bad.”

He said the consequences of such a move often are not what people expect.

“The minimum-wage issue is strange in some ways,” Perryman said. “A lot of critics say that it raises overall wages and causes inflation, but it really doesn’t. It is well below most wages and historically has not played a role in affecting overall wages or prices.

“On the other hand, increases are often not particularly beneficial to low-wage workers,” he said. “Many minimum-wage workers are teenagers, students, retirees, second-earners and so forth. Hiring in the low-wage sectors usually goes down when the minimum wage increases, thus reducing opportunities for these groups.”

Only time will tell if the potential move would hurt or help the economy. Regardless, Crutchfield thinks it would impact Killeen about the same as it would the rest of the country.

“It’s a national imposition,” he said.

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