Minimum wage hike helps employees, hurts small businesses

Minimum wage hike helps employees, hurts small businesses

By KRISTYN CADDELL
6 News Reporter 

KNOXVILLE (WATE) -- Starting Friday, more than 2 million Americans will get a bump in their paychecks when the minimum wage increases. But it's not good news for everyone involved.

The minimum wage is going from $6.55 an hour to $7.25.

In this economy, that's a lot of money for small businesses like The Amber Restaurant in Heiskell.

The restaurant has four employees who'll go from making $7.00 an hour to $7.25.

If you do that math, here's the breakdown. It's $1.00 extra an hour, $40.00 extra a week and $1,920 extra a year.

"That is going to be a significant amount on the total amount of the payroll," explains owner Donna Padgett.

The restaurant, which is known for its low prices, has gradually increased them and might have to again.

"If we do, we would do it very slowly," Padgett says.

She also says existing employees who deserved a raise won't be getting one and you won't see any "now hiring" signs here for a while.

"I can't afford to bring any new ones on. The ones that are here will have to get the job done," Padgett explains.

Owners hope that for the time being, they can keep their heads above water.

This minimum wage increase is the last of three created by the Fair Minimum Wage Act of 2007.