Effects Of Wage Increase

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Judy Hare is the owner of Aggieland Flowers, and she said as the minimum wage goes up, so will everything else.

"I think it's all just going to be a domino effect," Hare said. "Their food is going to go up. You know, everything is going go up, and you are going to end up at the end having the same amount left over on the same amount of money you spend every month."

On Wednesday, legislation to boost the living wage rate passed through the House of Representatives. The plan has now moved on to the Senate. Some lawmakers say small business owners are going to need some type of tax relief.

Blinn College Economics Instructor Stephen Noel said if the bill passes without some provisions for small businesses, customers will see changes in the cost of goods.

"That is the only way that some of these businesses may be able to offset it," Noel said. "So that they do not have to raise prices or where they do not have to raise prices so much."

In general, Noel said the wage increase proposal will not help the economy to thrive.

"It's going to slow down (the) growth of businesses. It's going to cause them to lay people off," Noel said. "It's going to cause them to have to raise prices."

The latter effect was echoed by Judy Hare. She said she will have to pass along the increase to customers.

"Eventually, they will just realize that this is what they are going to have to pay to get the product we offer," Hare said.

Besides higher prices, Noel said the bill will also create a need for current employees to receive a pay increase as well.

"He (or she ) is going to want more than that because they will have dropped his purchasing power down to that of somebody at minimum wage," Noel said.

Hare agrees. She said to give equal raises to all employees would be fair. As the debate continues, it will be the government who makes the call, either now or later.