It's true many of the employees who are earning at or below the federal minimum wage of $7.25 per hour are younger. One of the arguments against raising the federal minimum wage is that many of the workers earning $7.25 are part-time teens and college students earning spending money through a side job. "We've been able to survive with 100% takeout and we think that coming out of the pandemic, we will be able to retain more of that business and hopefully, continue to stay ahead of the minimum wage," Puckett says. In order to combat rising labor costs, Punch Pizza has focused on ways to grow sales, including expanding into takeout during the pandemic. "We're trying to figure it out," Puckett says of the impact of the rising minimum wage on his business. Paul is in the process of gradually raising minimum wage to $15 per hour by 2022. While paying employees more than the minimum wage is a priority, it means the company is giving up profit margins in the short-term since labor costs for Punch Pizza are about 40% of sales, Puckett says. And St. "We expect to lose that until we're able to safely reopen our dining rooms," Puckett says. Punch Pizza lost over $1 million in revenue last year and will likely continue to lose tens of thousands of dollars a month this winter. Established employees earn an average of $15 per hour, plus an additional $5 in tips, co-owner John Puckett said Wednesday during the congressional hearing. Paul, Minn.-based pizza chain Punch Pizza, which was acknowledged in former President Barack Obama's 2014 state of the union for paying its employees above minimum wage and currently pays an average of $13 per hour for starting wages. Yet proponents of the wage increase say that raising the federal minimum to $15 per hour will not only benefit workers, it will actually help small businesses by increasing consumer spending, lowering turnover and spurring better productivity and customer satisfaction.īut the reality can be complicated, as shown by businesses that already pay above the minimum wage. The CBO report found that the federal minimum wage increase to $15 would reduce employment in the U.S. Elizabeth Ann Van Duyne, R-TX.Īdditionally, many opponents of the $15 minimum wage fear it will lead to job losses and business closures. I can't think of anything more devastating at a time when our small businesses are barely getting back on their feet," said Rep. "A federal, nationwide mandate to raise the minimum wage to $15 per hour will put us right back to where we were months ago - American jobs destroyed, small businesses forced to close their doors and life savings gone to waste. In light of those struggles, some lawmakers feel now is not the time to raise operating costs for businesses. About 53% of companies with less than 50 employees surveyed reported the pandemic has had a moderate to severe impact on their business, according to the CBIZ Main Street Index. There's no doubt that companies across the world have been dramatically impacted by the Covid-19 pandemic, and that's especially true of small businesses in the U.S. Will legislation create another blow for small businesses? Meanwhile, the $10 increase proposed by Romney and Cotton would only boost wages for 4.9 million workers, or 3.2% of the workforce, according to a report released Wednesday from the Economic Policy Institute. Another 10 million additional workers earning slightly above $15 per hour would be affected. workers, according to the Congressional Budget Office. Raising the federal minimum wage to $15 per hour would increase wages for 17 million U.S. But there are many more millions of workers who earn just above minimum wage. However, the bill also mandates that employers use e-verify to ensure that businesses are not hiring illegal immigrants.Ībout 1.1 million hourly workers earned wages that were at or below the minimum wage last year, according to the Bureau of Labor Statistics. The legislation is currently included in the House version of the $1.9 trillion relief package that is set for a vote on Friday, but it's unclear if that provision will pass the Senate.Īnother option, announced Tuesday by Senators Mitt Romney, R-Utah, and Tom Cotton, R-Ark., would be to increase the federal minimum wage to $10 per hour by 2025 and then automatically increase it every two years to match the rate of inflation. Late last month, Democrats introduced the Raise the Wage Act of 2021, which would gradually increase the federal minimum wage from $7.25 to $15 by 2025.
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