How will a $15-per-hour federal minimum wage impact Alabama small businesses?

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BIRMINGHAM, Ala. (WIAT) — President-elect Joe Biden’s $1.9 trillion dollar American rescue plan includes an increase to the federal minimum wage, bringing that wage to $15 an hour. The federal minimum wage has not been increased since 2009.

Small businesses in Alabama have had a tough year because of COVID-19. After closures, losses in sales, and a worsening economy, some are concerned an increased minimum wage will be a difficult transition.

At Savage’s Bakery in Homewood, the pandemic already spread their staff thin. The family-owned business said a $15/hour minimum wage would impact the way they hire.

“We are sort of forced to reduce the number of hours we give our full-time staff,” said Elizabeth Scott, VP of the Bakery. “We’re not incentivized to hire high school or college kids who are working their way through school.”

Scott said increasing minimum wage right after the pandemic will be difficult for small businesses like hers.

“It would further feel like a punishment in many ways to us as small business owners,” said Scott.

Zebbie Carney, the owner of Eugene’s Hot Chicken in Hoover and Birmingham, is for a livable minimum wage.

“I agree– everyone needs a living wage, a nice living wage,” said Carney. “It’s just like everything else, like with COVID, you just got to adjust to the changes.”

Carney said he would have to change staffing, and customers would see the impacts of the higher pay as well.

“That’s going to change a lot,” he said. “The way people cost out their menu. Restaurants can’t fill all the brunt themselves, some of it has to be passed on to the consumer.”

Scott agrees, an increased wage would have a ripple affect, from hiring, to shifts, to pricing.

“Unfortunately for a small business, the market can only bear so much in terms of what customers will be willing to pay for birthday cake,” said Scott.

Biden’s stimulus plan also includes a new $15 billion grant program to provide aid to small businesses.


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