By allowing ads to appear on this site, you support the local businesses who, in turn, support great local journalism.
Wage hike takes effect
Minimum rises to $7.25 an hour
Placeholder Image
Forsyth County News
Beginning Friday, the country’s lowest paid employees will make $7.25 an hour.

The wage increase from $6.55 is great news for those earning the federally mandated minimum wage, but area businesses are less excited.

In 2007, the federal minimum wage rose for the first time in about a decade, from $5.15 to $5.85 per hour. It jumped another 70 cents in 2008.

“It’s no longer a minimum wage,” said Mike Ridzone, owner of the Chick-fil-A in Cumming. “When people think of minimum wage, I think they think of the low end of the spectrum. Frankly, I don’t think $7.25 is the low end of the spectrum.”

About a quarter of Ridzone’s 76 employees earn the minimum wage. Many of them are students, who Ridzone said will now be held to a higher standard.

Movies 400 employee Stacie Gustafson said she’s “really excited” for the wage hike.

The 19-year-old plans to keep working for the movie theater in Cumming while attending Georgia Perimeter College in the fall. She said the extra money could help.

“Basically, I’m saving up so I can go on trips for college, so I can go to Europe [to take] other classes there,” she said.

Gustafson, who started working part time at the movie theater in May 2008, said she’s not the only one who could use the extra money.

“It will definitely help a lot of people that are making minimum wage,” she said. “They can have more money to help their families and more money to spend on themselves and make themselves happier.”

But with the state’s unemployment rate topping 10 percent, many people are looking for any work they can find. As a result of the wage increase, even the lowest paying jobs could become more competitive.

“The pressure’s going to be on,” Ridzone said. “There’s no wiggle room for a learning curve.”

About 2 percent of the nation’s population earns the hourly wage or less, according to federal labor statistics from 2007.

Many of the minimum wage workers are employed in the food industry, said John Heavener, president of the Georgia Retail Association.

“It’s going to put pressure on those businesses in the food service industry like McDonald’s and Burger King,” he said. “Most of the big boxes are paying $10, $11 and $12 an hour, so they’re already above that. But small mom and pops who may be hiring teenage help might be hurt.”

There could be a positive swing for retailers, Heavener said. Low-income workers may have more discretionary income as a result of the extra $100 or so a month.

“Maybe that will help overall to stir the market up,” he said. “But for the most part, we believe in paying what the market will bear and not having the federal government or state government mandate wages.

“But most retailers will try to grin and bear it and move ahead.”

Publix grocery stores have already made the change, said spokeswoman Brenda Reid. Just a small portion of the Southeastern store’s 140,000 associates currently earn minimum wage.

“Payroll is our largest portion of our budget, so any changes where we have to increase our payments to our associates affects our budget, especially during these economic times,” Reid said. “But we knew it was coming so we adjusted appropriately.”

When the last wage hike happened, Kay Brown was already struggling with other increases. Brown, an owner of Sogno Gelato in Vickery Village, said the cost of sugar, gas and other necessities rose last year.

“Everything went up, so it affected us greatly because our profit margin decreased because we couldn’t increase our prices because the market wouldn’t allow us to,” she said.

“I think the same thing is happening this time, where minimum wage is going up. But we’re not going to be able to increase our prices because this time what’s affecting us is the recession. So I think that we’re going to have to work harder to get the same results.”

Brown said the shop has about eight employees, a majority of whom earn minimum wage. Brown said the store plans to stay at or below 10 employees.  

Like Brown, Ridzone doesn’t plan to lay off any workers, though incentives or bonuses may drop.

The store, he said, is dealing with the mandate, but in the end it is “going to be something a lot of people are going to end up passing onto the customer.”

“We just got finished with costs going up, and that’s settling down a bit and now this is going to be something else thrown in,” he said. “I think if the government would just leave it alone, the market would take care of itself.”