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Businesses expect increase in costs after minimum wage hike

Posted at 6:27 PM, Oct 01, 2021
and last updated 2021-10-02 01:17:30-04

TALLAHASSEE, Fla. (WTXL) — Businesses like Savour in Downtown Tallahassee say that it's not their employee salaries that will drive prices up after the minimum wage hike. Instead, everything else from production and delivery of goods.

Up until Thursday, the minimum wage was $8.65 an hour. Now, employees will be earning at least $10 an hour.

Advocates for the increase in minimum wage want workers to be able to make a livable wage. From now until 2026 there will be a one-dollar increase until that wage hits $15, a decision passed by voters in 2020.

With the change restaurant owners like Drew McLeod are worried about an increase in prices at places like warehouses where goods are packaged and delivered, citing those employees will now have to make more money and, in turn, companies will also have to increase how much they charge for their services.

"Most of my colleagues in this industry pay their back of the house staff more than 10 dollars an hour now," said McLeod. "So with this increase, the only effect is that my servers and bartenders who are currently making over $30 an hour are going to get more per hour. As a result, the cost is put on operators, and I'm looking at about a $25,000 a year increase in costs in each of the next five years."

Ahead of the increase, a person working forty hours a week on minimum wage would only make about $18,000 before taxes. The bump to $10 dollars will mean an increase of just over $20,000.