President Obama was barely into his post-State of the Union road trip today when House Speaker John Boehner poured cold water all over one of the key economic items in the speech. The president proposed raising the minimum wage to $9 an hour. Boehner said it would hurt small business and kill jobs.
Economists disagree about whether raising the minimum wage helps by putting more money in the hands of low-wage workers or hurts by encouraging employers to eliminate jobs. A raise from to $9 an hour, from $7.25 an hour, would add about $3,600 to a minimum wage earner’s annual income — and a business’s payroll.
Many minimum-wage workers are employed in the restaurant business, although their wages are often supplemented by tips. At the Marmalade Café in El Segundo, Calif., employees like 32-year-old food runner Alejandro Serbin earn California’s $8 minimum wage, plus about $35 a day in shared tips.
Serbin, an immigrant from Mexico City, says a dollar raise would help. “It’s so much different for me. Because I have a family I have to support. The rent is high. I have to pay bills, insurance.”
Serbin and his wife, who works as a cook, have a 3-year-old and pay about $1,000 a month in rent, not unusual for Los Angeles. He’s hunting for a second job and says most of the minimum-wage workers he knows have two or even three jobs.
Selwyn Yosslowitz is one of the Marmalade Café’s founders. The restaurant employs about 600 people in nine locations in southern California. Yosslowitz says a dollar increase in the federal minimum wage would likely force him to raise prices or cut labor costs.
“It wouldn’t be layoffs,” Yosslowitz says. “But maybe you make the hours more efficient. There’s lots of people who come in at 9 o’clock right now. I would make sure they come in at 9:30 and cut off half an hour across the board to be able to afford the increase.”
Serbin and a co-worker from Peru say their hours are sometimes cut when business is really slow and management sends them home early.
If Congress raises the minimum wage, that ultimately may help boost all the wages at a place like the Marmalade Café, including the better-paid cooks in the kitchen.