9OYS Consumer Watch
Minimum wage increase could be bad for small business
While the 15 cent wage increase may not seem like much, the majority of Tucson's smaller merchants could feel the crunch come January 1. Video by kgun9.comvideo
Reporter: Cory Marshall
TUCSON(KGUN9-TV) - Minimum wage workers across Arizona will get a small pay raise come January, 1.
Effective next year, the state minimum wage will jump 15 cents, increasing from $7.65 to $7.80. For minimum wage earners, the raise is welcome news.
"There are a lot of business models that are built on an entry level workforce. Fast food is a a great example where you pay minimum wage and every time that minimum wage goes up the business owner has essentially two choices; either raise prices to everyone or cut some people out of the workforce and that happens," Tucson Metro Chamber President &CEO, Mark Varney said.
According to Varney, while 15 cents may not seem like much, the majority of Tucson's smaller merchants could be hit hard.
"There's no question. It's going to have an impact on the company's fixed cost and they're going to make an adjustment for their workforce cost," Varney told 9OYS.
The latest increase is intended to offset inflation. Federal minimum wage is below the state's new standard. Federal minimum wage is currently $7.25.