Thousands of North Idaho workers got a federally mandated pay raise this week - and prices rose slightly at some businesses.
Idaho’s minimum wage jumped to $4.75 from $4.25 as the first of two raises resulting from federal legislation signed this year.
However, both workers and business owners expect the next increase of 40 cents, scheduled for Sept 1, 1997, to make more of a difference in pay checks and some product prices.
“A lot of people don’t realize the trickle-down effect this has for a business,” said Joe Cosgrove Jr., owner of Little Joe’s Espresso.
Cosgrove paid his employees slightly more than $4.25 per hour prior to the federal minimum wage increase. So higher labor costs won’t hurt him much. However, he worries that his suppliers - or at least those who pay minimum wage - may increase their prices.
“If their prices go up, then my prices go up,” Cosgrove said.
For now, he’ll leave latte prices the same at his espresso bars.
But prices are rising elsewhere.
Glazed cake doughnuts cost a few cents more at Davis Donuts in Coeur d’Alene. Despite this week’s price increase, one worker there doubted she would see much of her 50-cent-an-hour pay raise.
“It’s all going to go for taxes,” she said, assembling a box of a dozen doughnuts. “It doesn’t matter what the wage is.”
Others such as Tabatha Lefler, 19, of Coeur d’Alene, make more than $4.75 an hour now, but likely will enjoy a raise next year if still at the same job. Lefler works at French’s Dry Cleaning in Coeur d’Alene. “It’ll be good to get it,” she said.
About 18 percent of Kootenai County’s workers make less than $5.15 an hour, said Kathryn Tacke of the Idaho Department of Labor. That compares to about 16 percent of the work force statewide.
Many retailers, restaurants and other service employers start their workers slightly above even the new minimum wage, Tacke said.
“There’s been a lot of wage pressure here,” she said. Competition to attract good workers forces wages up.
The next pay hike will have more of an impact, Tacke said, although this week’s likely will raise the average county wage.
Fears that hikes in minimum wage will increase unemployment appear to be unfounded, Tacke said, although thoroughly debated by economists. The last minimum wage increase in 1991 didn’t alter unemployment levels in Kootenai County, she said.
Ed Hatter of Hatter Investments, which owns and operates several Burger King restaurants in the region, said this week’s increase didn’t really affect his pricing or employee costs.
However, he said, the next raise probably will be reflected in higher Burger King food prices because his labor costs likely will go up.
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