Minimum Wage Increase Either Means More Pay or No Pay At All

By: Leah Uko

OMAHA (KPTM) - The federal minimum wage will increase soon. The good news is some people will earn more money. A government report said it would mean 900,000 people get above the poverty line, but the bad news is that a lot of companies are already saying they will cut jobs because of it.

The Congressional Budget Office said President's Obama's decision to sign an order to raise the federal minimum wage from $7.25 an hour to $10.10 an hour will cause a loss of 500,00 jobs.

Starting in 2015, businesses with new or renewed federal contracts will have to pay their minimum wage employees $10.10 an hour. Among the types of workers who would benefit from the president's executive order are concession workers in national parks, nursing assistants who care for veterans, people who serve food to U.S. troops and who maintain the grounds on military bases, the White House said.

Tipped employees would also benefit. Currently, the wage for employees who earn tips is set at $2.13 an hour. Under Obama's mandated increase, the wage will increase to $4.90 and increase 95 cents a year until it reaches 70% of the regular minimum wage.

"If it's going to happen, it's going to happen. There's nothing really I can do about it. I just have to react to what the wage will be," said Mike Jenkins.

Jenkins is the owner of Blue's Boos and BBQ near 72nd and Pacific streets.

He said, personally, he agrees with raising the minimum wage.

"But as a business owner," Jenkins added. "Somebody is going to have to pay for them to get a higher wage and most times, it just naturally comes at higher prices."

Jenkins said if he had to pay his tipped staff $4.90 an hour, his budget would increase at least $1,000 per pay period. He added that laying off any of his 17 employees would not be an option.

Unfortunately, raising the prices on the restaurant's menu would.

"I prefer not raise prices I like where they're at right now. I know how it is to work 45, 50 hours a week and then only make like 200 bucks for a paycheck."

According to the Bureau of Labor Statistics, in 2012, 32,000 workers in Nebraska were paid at or below the $7.25 an hour federal minimum wage.

Nebraska is currently ranked 13th highest for the percentage of hourly workers making at or below minimum wage and 2nd highest among neighboring states. The last time minimum wage was raised was in 2009, but inflation has went up since then.