How would higher minimum wage impact Utah?

SALT LAKE CITY, Utah (ABC4 Utah) - After Target announced it would raise it's minimum wage to $15 an hour by 2020, many have wondered if Utah would soon raise its wage from $7.25 an hour. Economist and restaurants said it could have mixed results.

Richard Haskell, PhD, is an associate professor at Westminster College, and an economist. He points out many are already leaning towards a higher minimum wage.

"They're going there and they're trying to have a first mover advantage if you will," said Haskell, "but the fact of the matter is they're just following a trend."

Haskell said a minimum wage increase can be effective, depending on the outcome people are looking for. While he says minimum wage increases can be good for raising people's incomes. He notes it's not always effective for solving other issues.

"If our goal is to alleviate some of the income inequality then a change in minimum wage might not be the most efficient way of doing that."

Haskell said raising the minimum wage too fast can have unintended consequences such as high inflation. He notes some small wage inflation can be good.

Utah is tied to the federal minimum wage which is currently at $7.25 an hour. Although other companies like Wal-Mart have already set their minimum wage to $10 an hour back in 2016.

Restaurants and other service industry small businesses are often the ones you can feel a minimum wage impact the most.

Mike Richey is the head chef and owner Fireside on Regent which opened within the last six months. Richey said he pays his non wait staff well above the minimum wage, but not quite $15 an hour. He points out that in small margin businesses like restaurants a higher minimum wage can make it harder to get started.

"It would effect any small business or restaurant going into their first year," said Richey. "Which is the hardest year that they're going to have."

Richey said thankfully his businesses has found success early.

Other restaurants like Veneto in Salt Lake City don't believe a higher minimum wage would have much of an impact. Owner Amy Stevanoni said they are a no tip restaurant and already pay their employees $14-$20 an hour.

Her husband is from Italy where tipping is considered a foreign concept, and waiters are paid well, but expected to perform well too.

"For us it's not even a question this is a part of our concept," said Stevanoni. "It does take time to find people, but it's worth it."

Economist note that a higher minimum wage can lead to automation in some industries which is already being seen. Haskell notes that's always been in case in the U.S. economy as technology improves. With the ATM being one of the prime examples.

 


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