Jan. 04--On New Year's Day, San Francisco became the country's highest-paying minimum wage jurisdiction by paying $10.24 an hour.
Local reaction to the wage was mixed Tuesday.
Most employers tend to be against increases in minimum wages, particularly in an area like Maryland and the District of Columbia, where wages tend to be above national averages, Manpower Regional Director Lisa Coblentz said.
"For San Francisco, the increase to $10.24 an hour means it will be a desirable place to seek employment, however, it may mean the closing of their doors for some employers who are already struggling," Coblentz said.
Most states, including Maryland, have had significant increases in their state unemployment tax rates due to recent high unemployment. Increasing the minimum wage "may be the nail in the coffin for a struggling business," Coblentz said.
Tatyana Ceasar said she has had her share of minimum-wage jobs, but the Frederick Community College student is unsure if raising the limit will benefit workers.
"Raising the minimum wage is good and bad," Ceasar said. "Who doesn't want more? But if the minimum wage is raised in Maryland, other things will be raised so it balances out. In San Francisco, the cost of living is high, so it balances out."
Frederick resident Dolly Gunneaux agreed.
The minimum wage "has to do with the area," said Gunneaux, as she walked out of Frederick Towne Mall.
"For example, it doesn't cost that much to live in certain parts of West Virginia, but Frederick is getting big, the cost of living is rising and they (employers and lawmakers) need to get with the times. Trying to live on $7.25 an hour in this area won't work."
Gunneaux said her husband operates a small auto repair business. A depressed economy has resulted in people getting minimal repair work done on their vehicles, and her husband has struggled to avoid laying off any of the shop's nine employees.
"If business doesn't start getting better, it's cheaper to let people go and pay unemployment insurance," Gunneaux said.
Area residents are fortunate that most people make more than minimum wage, and the average household income levels are significantly higher than what minimum wage levels would be, Coblentz said.
"However, the minimum wage is significant for all employers, because it sets the bar for the starting point for wages," Coblentz said. "An increase in the entry-level salaries will usually mean a trickle-up effect on all the other wages in an organization."
Locally, entry-level jobs for employers like the hospitality and food service industries are notably affected by changes in the minimum wage, Coblentz said.
"In a truly free enterprise system, wages will increase naturally as cost-of-living increases occur. Also, the most successful businesses will generally pay higher wages," Coblentz said.
"All employers are forced to stay competitive with their wages and benefits offered when finding and keeping the talent that they need to be successful. It often comes down to supply and demand. As unemployment decreases, we generally see average wages increase."
(c)2012 The Frederick News-Post (Frederick, Md.)
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