Columbia businesses say higher wages would mean higher prices

Business owners told KRCG 13 Saturday a minimum wage increase like California's would force them to raise prices, potentially driving customers away.

Rollie Bartels, who owns the Tiger Express Car Wash chain, said if minimum wage goes up, he would have no choice but to raise prices on car washes. He said anticipated increases in healthcare costs already forced him to raise his prices by 49 cents in August. Similarly, Lutz's BBQ owner Burl Lutz said if minimum wage was raised, he would not be able to pay his workers without raising menu prices.

Across town, James Yates was about to start his shift at a Sub Shop outlet. Yates said he currently makes minimum wage at his job and would welcome a higher wage.

"I've worked jobs where I've made more than minimum wage, and life is a lot less stressful when you make more than minimum wage," he said.

But Yates said business owners' concerns about losing business are valid. He said at his past jobs, whenever he got a pay raise, his employers would raise prices and business would drop shortly thereafter. He said he expected the same would happen at Sub Shop if minimum wage in this state went up.

California lawmakers voted this week to raise the state's minimum wage from its current $8 an hour to $10 an hour by 2016. By comparison, the federal minimum wage sits at $7.25 an hour, while Missouri's is at $7.35 an hour. KRCG 13 compared the cost of living in Columbia to Berkeley, Calif. Both are university towns with a population of a little more than 100,000. According to statistics from the Council for Community and Economic Research, the cost of living in Columbia is about 40 percent lower than in Berkeley. For example, the council estimates apartment rent in Columbia averages $673 a month, compared to $1,572 a month in Berkeley. Under current minimum wage laws, it takes a little more than two weeks for minimum wage to pay off monthly rent in Columbia. In Berkeley, it takes almost five weeks, even though California's minimum wage is already higher than Missouri's. California's new minimum wage would mean this would take a little less than four weeks. If Missouri increased its minimum wage by the same percentage, to $8.82 an hour, it would take just under two weeks to pay off a month's worth of rent.

The Center for Economic and Policy Research reports that if minimum wage had been tied to the Consumer Price Index, the federal minimum wage in 2012 would have been $10.52 an hour, higher than California's new level and markedly higher than the $9 per hour wage President Barack Obama called for at the start of this year. Congressional Democrats filed a bill to raise the federal minimum wage to $10.10 per hour this spring, but that bill never had a committee hearing.