Issues

Minimum Wage Hikes to Take Effect Friday in 15 Cities

AP

Minimum wage increases are set to go into effect in 15 localities on Friday.

Minimum wage increases will go into effect in 15 cities in California, Kentucky, Maryland, Oregon, and Illinois, as well as the District of Columbia.

Those increases threaten to curb hiring and see businesses reduce hours, according to critics. Michael Saltsman, research director at the free market Employment Policies Institute, told the Washington Free Beacon called the rise of the minimum wage "unprecedented."

The $15 hourly rate that many are pushing for amounts to a minimum salary of about $30,000 a year for the average full-time worker, according to Saltsman. Saltsman said that employers will struggle to deal with the steep hike in labor costs.

"Historically, any time the minimum wage goes up, if employers can’t offset that by upping prices, they have to find other ways to trim costs, which can mean fewer jobs," Saltsman said.

Some employers have embraced touch screen ordering at fast food restaurants, and tablets at sit-down restaurants to deal with wage increases. Other businesses have had to shut their doors because they cannot afford the minimum wage increase.

Higher-skilled employees will also be affected by the hike of lower-skilled and entry-level workers. Employers will find that they do not have the wiggle room to reward longer-term employees or workers who provide advanced service to the company.

"I think the way the ripple effect happens is, you have young employees less able to find work, and the [high-skilled workers’] harder work is devalued," Saltsman said. "You have assistant managers who had to work their way up to $15 an hour, so what does it say when somebody comes in the door making that same amount? It messes up the incentives and motivation people have."