Obama proposes $9/hour minimum wage. OK, says business owner.
When President Obama proposed raising the minimum wage from $7.25 to $9 an hour, one Virginia business owner decided to do it on the spot.
In this AP file photo, President Obama delivers his State of the Union address on Feb. 13. The Obama administration came out in support of laws changing the restrictions on unlocking cellphones on Monday.
Charles Dharapak/Pool/AP
Many employers cringe at the thought of paying higher salaries, but after hearing President Obama say that the current minimum wage isn't enough to keep workers out of poverty, one businesswoman actually did. On the spot.
"Obama says to raise minimum wage to $9.00/hr. So I did!!!" posted Kelly Wilson, a small business owner in Virginia, on her Facebook wall. " If my little company 3D Sports can do it, maybe some of the big rich companies can do it too!!!"
Raising wages – often the lion's share of expenses for small businesses – won't be easy.
"It's going to pinch us a little bit, there's no two ways about it," Ms. Wilson notes. 3D Sports offers coaching in baseball, basketball, field hockey, softball, and soccer, so in addition to her year-round crew of six to eight, she hires 15 to 20 coaches each summer. "I already run a pretty tight ship, in terms of the number of people," she adds.
Virginia is one of 31 states whose minimum wage is $7.25, the federally mandated minimum since July 2009. In his speech, the president said, "Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour."
The proposal is always controversial. Conservatives say it's the wrong way to help low-income workers.
“The president is entitled to his opinion, but the facts are indisputable: Minimum wage hikes lead to job losses,” says Michael Saltsman, research director at the Employment Policies Institute, a nonprofit research organization in Washington.
Liberal groups argue that it helps boost living standards.
Increasing the minimum wage from $7.25 to $9 would benefit 21 million workers and increase wages by $22 billion by 2015, says Lawrence Mishel, president of the Economic Policy Institute, a nonprofit think tank in Washington. "This will not only boost wages but facilitate greater job growth by increasing spending by low-wage workers."
This morning, Wilson texted her employees that their hourly wage would jump to Obama's recommended $9 per hour: "Congratulations on your raise!"
Not everyone believed her at first, she says. When she reiterated her promise, one texted back, "Wait, you were serious about that?"
Wilson says she doesn't expect a host of other employers to follow her lead. But that's not the point, she says. "I'm not trying to set a trend. I'm trying to do what is right."