Minimum Wage Hike Hitting Consumers in the Pocketbook

As we covered earlier in the week, the Ohio minimum wage hike, and pending federal minimum wage hike, are having unwelcome consequences to consumers. The restaurant owner that I spoke of in the previous post is definitely not alone, as the Columbus Dispatch has a story today about rising prices due directly to the increased minimum wage that took effect on January 1, 2007. I also talked briefly about the fact that employers will not be able to hire as many workers or give current workers as many hours as usual in order to offset the costs, and this quote from the article about Columbus-based Max & Erma's perfectly illustrates that.

"The company also plans to improve its scheduling to make up the remainder of the pay boost’s total impact, which is estimated at more than $1 million a year at the chain’s 33 Ohio units."

By the way, "improve scheduling" is corporate-speak for cut hours and staff, for anyone who did not catch that. Another portion of the article talks about another Columbus-based restaurant chain, Bob Evans, and the negative impact that the higher minimum wage is having already on their stores.

"Bob Evans, which employs tipped servers and hourly workers, operates on slim margins, so any significant cost increase has an impact on the bottom line, said Tammy Roberts Myers, spokeswoman for the Columbus-based restaurant chain."

Beyond not actually helping workers, and being bad for business and the customers of those businesses in general, this hike is hurting Ohio-based businesses as well. Nothing says, "Ohio is open for business," quite like killing your homegrown companies.