Change in minimum wage has minimum impact

Though the federal minimum wage recently rose by 70 cents, only 2 percent of the nation’s workforce experienced a pay increase, according to the Bureau of Labor Statistics.

Not one parish worker was counted in that 2 percent.

“All entry civil service jobs pay more than that minimum,” Sandy Zimmer, the parish’s personnel director, said. “I expect our entry-level wages to be recommended for increase as a result of a salary survey currently being conducted by an outside firm.”

The increase, from $5.85 to $6.55 per hour, is the second of three annual increases that are required by a 2007 law. The first increase occurred last year, when the minimum wage was raised from $5.15 to $5.85. Next July, minimum wage will be $7.25 per hour. Before last year’s Fair Minimum Wage Act of 2007, the national minimum wage had been left unchanged at $5.15 an hour since 1997.

According to research by the Center on Budget and Policy Priorities, raising the minimum wage from $5.15 to $7.25 would mean an additional $4,200 in annual earnings for a full-time, minimum-wage worker.

But things have changed drastically over the last year. The Labor Department says that fuel costs in June were 61.2 percent more than they were at that time last year. Food has risen by 5.3 percent during that period, while household energy has jumped by 13.7 percent.

Because of that, the new minimum wage is less than the inflation-adjusted 1997 level of $7.02, according to the Labor Department’s inflation calculator.

In fact, the Economic Policy Institute says that the new federal minimum wage is still below the minimum rate in 23 states, including Louisiana. That means that at the new federal level, a full-time, minimum-wage worker earns below the poverty line for a household of two, the institute said.
The parish’s large employers, like Wal-Mart and Win-Dixie, have been planning for this change. Some locally-run businesses, such as Rotolo’s Pizzeria, already pay their workers above that minimum amount.

“We start our workers out at $6.75, so we honestly didn’t feel any effects from the change,” Jacqueline Dufrene-Diaz, who owns the pizza joint with her husband, Michael, said. “It is so hard to find good workers, so we start them off above the minimum wage amount.”

Shea Majoria, co-owner of Majoria’s Supermarket, says that the new minimum wage will cut into his store’s profit.

“Of course, when you have unskilled help, it will eat into the profit,” he said. “We aren’t going to have to raise our prices because of the new minimum wage, but the rise in the price of groceries and fuel is causing an increase in prices.

“Somebody has to pass the buck.”

And while there aren’t that many minimum-wage employees at local businesses, Corey Faucheux, the parish’s economic development director, says some of that cost increase might be passed along to consumers.

“We’re not going to be affected any differently than other parishes and cities across the country,” he said. “It will affect our smaller businesses, but they are going to try to pass along as much of that cost as they can.”

The National Federation of Independent Business has traditionally opposed minimum-wage hikes because they believe they are harmful to small business owners that are already struggling with increasing costs.

“With inflation pressures increasing for small business owners, this is not the best time to be forcing employers to pay workers higher wages,” NFIB Chief Economist William Dunkelberg said in a statement. “Every dollar a minimum-wage worker gains must come out of either the income of the business owner, so they have less to spend on their business, or out of the pockets of customers, who will have to pay higher prices and will have less money to spend on other goods and services.”


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