Raising the minimum

Raising the minimum

July 23rd, 2009 by Pam Sohn in News

Staff Photo by Dan Henry Camp counselor Chelsey Campbell, center, works with Jagger Mitchell, left, and Aaron Millard on writing compliments about fellow students during Belvoir Christian Academy's summer camp on Wednesday.

Staff Photo by TIm Barber Jamie Whitworth, 21, runs food on Tuesday at the Park Place Restaurant in Fort Oglethorpe. Friday, she will get a raise as federal guidelines manadate.

Lotta Hoge is looking forward to getting a raise Friday when the federal minimum wage rises nearly 11 percent to $7.25 an hour.

"I'm excited," said the 40-year-old wife and mother of two. "I'm just happy to have a job. In these times, it's not easy to get a job anymore."

Mrs. Hoge is one of eight part-time summer camp counselors at Belvoir Christian Academy in Chattanooga who will get a raise because of the increase. During the school year, she is the academy's salaried cafeteria manager, but this year, with her husband laid off from his heating and air conditioning job because of the housing construction slump, she also is working over the summer for minimum wage, which has been $6.55.

"The job is fun, and the extra money helps make up some of the difference," she said.

University of Tennessee economist Matt Murray said that, in this era of job cuts, furloughs, layoffs and pay cuts, workers getting minimum wage raises likely will be the only people getting pay hikes.

"We're seeing downward wage pressures," he said. "There are going to be very few (other raises). The rest of us aren't getting pay raises. The minimum wage workers are going to be the very, very few who see their wages go up in this very current economic environment."

Across the state line in Fort Oglethorpe, Jamie Whitworth, 21, also is looking forward to some extra money after Friday. She's one of three food workers at Park Place Restaurant who will benefit from the minimum wage increase.

"I'm ready for it. It will help me with gas money. I have to drive to Dalton a lot for school," said the Dalton State College student.

Time and changes

In 2007, the minimum wage was $5.85 -- up from the $5.15 that had held steady for a decade.

Friday's increase will be the third in three years, a gradual escalation designed by Congress to raise wages by $2.10. About half of minimum wage workers are part-timers, according to the Department of Labor.

Despite continuing debate about federal minimum wage rates, Dr. Murray said studies show they have moderate impacts on people and business. "The proponents of the minimum wage typically overstate the wage gains and the effects it has on poverty, just as the critics of the minimum wage overstate the costs and the consequences to business and the number of people who will lose their jobs as a result of the minimum wage," he said. "Most of the research shows very modest effects."

Park Place Restaurant Manager Amy Rogers and Belvoir Christian Academy Principal Frank Streufert said they don't view the upcoming raises as large impacts.

Mrs. Rogers, who manages the family restaurant owned by her parents, Jack and Karen Goodlet, said the general economy slump and rising prices are more likely to hurt the business than the raises due three workers.

Despite the restaurant's growth over its 17 years, she now employs about 20, half the people she did at the restaurant's peak employment, she said.

"This is a family business," she said. "We're working on a new menu now, and we'll try to keep our customers happy, but we may have to change some of the menu prices."

Keisha Carter, spokeswoman for the Georgia Restaurant Association, said that, while restaurant owners have known about the minimum wage change, "what couldn't be prepared for was the downturn of economy."

"Restaurants margins are very small -- about five cents on the dollar," Ms. Carter said. "Some restaurants will have to make adjustments to prices."

Chickamauga and Chattanooga city officials said the wage question would have less effect on their budgets.

MINIMUM WAGE INCREASES

1997: $5.15

2007: $5.85

2008: $6.55

2009: $7.25

Source: U.S. Department of Labor

What will the raise buy?

A family with a full-time minimum wage earner would see its monthly income increase by about $120, or:

* More than a week's worth of groceries for an average family of four

* More than one week's utility bills

* Three tanks of gas for a small car

Source: U.S. Department of Labor

Minimum wage workers**

* 73 million -- Nation's workers at or below minimum wage

* 89,000 -- Tennessee workers at or below minimum wage

* 76,000 -- Georgia workers at or below minimum wage

* 47,000 -- Alabama workers at or below minimum wage

**2008 averages

Source: U.S. Bureau of Labor Statistics

"We don't have anyone at minimum wage," said Chickamauga City Manager John Culpepper. "Our lowest paid person is at about $9.50. I wouldn't start anybody off at $7.25 because I can't keep anybody at that rate."

Richard Beeland, spokesman for Chattanooga Mayor Ron Littlefield, said raising 64 part-time city workers to the new minimum wage will cost the city $23,610. But the city adopted "livable" wages some years ago, which helped lessen the impact of the minimum wage hike, Mr. Beeland said.

Ms. Whitworth, the food runner at Park Place Restaurant in Fort Oglethorpe, is using her raise money to pay for college. She is attending Dalton State Community College to become an X-ray technician.

"I like it here. It's a good place to work," she said, returning her boss' smile. "But someday I have to move on."