Two bills could raise the minimum wage in Georgia. How will it affect small business?
On the heels of 29 states that have already raised the minimum wage above the federal minimum of $7.25 per hour as of Jan. 1 , some Georgia lawmakers have their sights set on higher wages for workers in 2015. State Senate Bill 15 would raise the minimum wage from $5.15 per hour to $10.10 per hour in the Peach State. Another bill in the House would increase the minimum wage to $15 per hour with future increases for inflation, if approved.
Sponsored by state Sen. Donzella James, the wage jump in the Senate bill would be effective 60 days following approval. Beginning January 2016, minimum wage would continue to rise each year should the cost of living increase.
Legislative sponsors of these proposals hope to provide Georgia workers with a better financial outlook. Small business owners, however, are not seeing the same benefits as lawmakers.
“Small business is getting bludgeoned by politicians,” says Brian Mayfield, NFIB/Georgia Leadership Council Chairman and small business owner of Techquidation Inc. in Woodstock, Georgia.
Georgia has been ranked among the top states for its business friendliness in recent years. The vast majority of employers in the state are small businesses, which employ nearly half of the private-sector labor force, according to the Small Business Administration.
Just two states, Georgia and Wyoming, have minimum wage levels below the federal rate of $7.25. Currently, Georgia’s minimum wage is $5.15 per hour, though minimum wage workers in the state are paid the federal rate. Georgia legislators have not increased the minimum wage since 2002, when it rose to $5.15 from $3.25 per hour.
Impact on Small Business
Any increase in minimum wage could impact small business negatively, eliminating many opportunities for suppliers of major corporations headquartered in the state, says Kyle Jackson, NFIB Georgia state director.
“It would have a reverse outcome the proponents [of the bill] are hoping for,” says Jackson. “There would be more people out of work.”
Mayfield also noted that a higher minimum wage would impact his ability and willingness to hire part-time workers at his business.
Raising the minimum wage in the state at any level would leave small business with a major problem. Instead of providing workers with more money in their pockets, small business would see more strain to cover the cost gap of increasing payroll.
“There’s only so much money in the pie,” says Jackson.
For NFIB members in Georgia, raising the minimum wage may result in small business owners compensating for the strain in other ways, such as raising prices or reducing employee benefits.
