Minimum Wage: Who Pays?
President Clinton and his allies in Congress are calling for another increase in the minimum wage. But they should consider the experience of small-business owners like me, who struggled through the last increase. I own and manage a small cafe. I have had as many as 16 employees; I now have nine. Most of them are teenagers; the rest, working mothers.</br></br>Before the last increase I wrote letters to the president and my congressmen. I explained that the mandated wage increase was only the tip of the iceberg. To maintain the wage increment for senior employees, I would have to raise their wages above the new minimum. My monthly payroll would increase by $570 -- and that didn't include the payroll taxes for Social Security, Medicare, unemployment insurance and workman's compensation. For my efforts I received nicely worded form letters about the benefits of the wage increase.</br></br>When the increase passed, I had to reduce staffing hours. Result: I am working harder to earn my money. I already worked six days a week, every week. The staffing cutbacks increased my workload by 15 hours a week. I also cut back on outside services, so I am now mopping my own floors two weeks each month and doing all my own accounting, the weekly laundry and as many of the repairs as I can.</br></br>When Mr. Clinton signed the wage increase into law, he had by his side a minimum-wage worker who stated that now she did not have to choose between paying her electric bill or her gas bill. The same evening, our local news interviewed a woman who said she would now be able to buy her daughter a compact disk player for graduation. I do not begrudge either of these women their good fortune. But business owners work hard too, and we also have to make tough choices. I suffer from several chronic illnesses, and the wage increase has forced me to cut back on medical care.</br></br>Money for minimum wage increases has to come from somewhere. Mr. Clinton's proposed increase would raise my annual payroll by $7,200, forcing me to close my doors. To the politicians I say this: You have the power to destroy the American Dream for thousands of small-business owners. If you pass another increase in the minimum wage, you can tell the teenagers and working mothers I employ why they no longer have jobs. Then try asking for their votes.