Small businesses, many of which are just squeking by as it is, are going to *LOVE* this one:
Higher minimum wage coming soon
Federal wage floor will rise to $7.25 an hour on July 24. Hike will be felt in 29 states. Can the job market handle it?
NEW YORK (CNNMoney.com) — The federal minimum wage is set to increase later this month as the job market shows signs of further decay.
The federal minimum wage will go to $7.25 an hour on July 24 from its current level of $6.55, according to the U.S. Department of Labor.
The impact will be felt in 29 states, and many of them plan to match the federal minimum when it goes through.
Seven states already have laws mandating $7.25 minimum pay, while 14 states and Washington, D.C., exceed the new minimum. Employers are required to pay whichever is the highest: Federal or state.
Last July, the wage floor was raised from $5.85 per hour. The increases were mandated by a bill passed by Congress in 2007, when the minimum was $5.15 an hour, where it had stayed for years.
I’ve seen a number of stories about teenager unemployment – when the adults are fighting for "leftovers", the high schoolers (and college aged) are getting crowded out – why take someone new when you can get a more experienced person (or, at least more of an adult) for the same price?
Problem is, in this economy, I’m afraid this additional distortion of the marketplace by those that (mostly) are mere professional politicians, is going to further tube the jobs economy. When human capital becomes more expensive than the resultant profit from that, those that can will try to automate those processes done by people. Those that cannot will either jettison the unprofitable souls and shift the burden onto the remainder, or shut down completely.
For most businesses, bad decisions evoke a response (hopefully to right the ship). Bad decisions foisted upon them by Government generally have no recourse – it will be employees that will bear the burden.
