Local Businesses react to potential minimum wage increase - KSWO 7News | Breaking News, Weather and Sports

Local Businesses react to potential minimum wage increase

Amarillo, Texas - A minimum wage increase could be on the horizon, but some area businesses are saying that might not be a good thing.

The president suggested in his State of the Union address raising the minimum wage substantially to bring many American's out of poverty. But some local businesses are saying the impact could be more far reaching.

"I remember when that happened before and some cuts that we had to make at that point. Even though we don't pay minimum wage, it definitely effects our payroll and the costs overall," Michelle Knevelbaard, owner of Animal Lodge in Amarillo says.

Knevelbaard, says raising the minimum wage will have a big impact on her business. But, she says those who will feel the effect, would most likely be customers.

"And hopefully no price increases would happen but, as we've seen in the past when minimum wage did increase the last few years, definitely saw a need for price increases then, and I do foresee in the future if payroll needs change in our country," Knevelbaard says.

Hiring part-time employees at her business would be hit the hardest.

Executive director for the WT Enterprise Center, David Terry, who helps small businesses get their start says those businesses will feel the pressure.

"It's like trying to increase the minimum wage to produce job growth is almost like trying to produce ice cubes in an oven. It's really just not something that will work. It is kind of counter intuitive," Terry says.

As a restaurant owner himself, Terry says that increase in paying his employees will most likely result in an increase in prices for customers as well.

Terry says the increase could also lead to lay-offs for many businesses. The rise in wages could also mean a rise in the cost of living, still leaving many American's living under the poverty line.

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