WILLMAR -- An increase in the federal minimum wage is fine, but it could have unintended consequences for disabled or senior workers, employers said Wednesday at a business gathering.
Carl Kuhl, an aide to U.S. Sen. Norm Coleman, met Wednesday with members of the Willmar Lakes Area Chamber of Commerce at the chamber offices in Willmar. Coleman supports an increase in the minimum wage, but hopes to see it attached to some tax incentives for small businesses.
Minnesota currently has a minimum wage of $6.15 an hour, which went into effect last year. The federal minimum wage has been $5.15 an hour for a decade.
A bill dealing only with raising the minimum wage to $7.25 an hour was on a fast track through the U.S. House but slowed down considerably when it reached the Senate this week.
Kuhl said he expects to see more negotiation before a settlement is reached that will lead to a minimum wage increase.
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The people at the meeting in Willmar presented him with an issue he said he hadn't heard about before.
Ruth Smith, office manager at Walt's Car Wash, said the business employs a dozen young people with disabilities. When the state's minimum wage increased last year, Walt's had to cut their hours because government programs limit how much they can earn, she said.
If they earn too much, they could lose their government assistance, she said.
"We now have 12 people sitting at home," when they would rather be working, she said. "If it goes up again, we're going to have to cut their hours more."
Smith and Walt's owner Walt Gislason said they are concerned about the health and the self-esteem of those workers, who are proud to have jobs in the community.
If Congress raises the minimum wage, it should also raise the earning limits for people with supplemental government income, Smith said.
Representatives from Target and Home Depot said they have encountered the same situation with senior citizens who could affect their Social Security income if they earn too much.
Kuhl said he would look into the income limit issue. It's something that is likely to interest Coleman as well, he said.
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Others at the meeting said they did not object to raising the minimum wage, but pointed out the impact it could have.
Dave Baker, who said no one in his hospitality business makes minimum wage, said it could still have an effect on his bottom line. Servers in restaurants in most states are paid a fraction of the minimum wage and make up the rest in tips. In Minnesota, they earn minimum wage and earn tips over that.
It's a state issue, but it's a major issue for Minnesota restaurants, he said.
"We're going to feel the ripple effect," said Liz Thompson, the human resources director at Home Depot in Willmar.
Thompson listed several possible effects. Many employees who make more than minimum wage will want to see raises, too, she said. The people in the lower 20 percent of the payroll may see raises, but others may not. Some work hours may be cut because businesses will need to protect their bottom line.
In the long run, "it could hurt morale," Thompson said.
Businessman Dave Reed suggested that the government should index the minimum wage so that it increases gradually along with inflation. It wouldn't have the same impact as the infrequent, large raises.
"It's not like the government doesn't do that already," he said. "It's an integral part of Social Security."
