In late May President Bush signed a federal minimum wage law that will raise the minimum wage by about 40% over the next two years. The wage increase will go into effect on July 23.
This is the first minimum wage increase in about 10 years, and it is scheduled to occur in three phases:
Summer of 2007 $5.85
Summer of 2008 $6.55
Summer of 2009 $7.25
Nevertheless, small business owners are understandably concerned. The extra wages must be paid, and the cost falls necessarily on the consumers. Burger lovers, pizza lovers, and many other Americans will find themselves shelling out more for their feeding frenzies over the years and employers are forced to readjust their prices to accommodate new federal requirements.
While this may be run-of-the-mill for large chains such as Burger King and Dominos, the price increase may force some small businesses to go under. When the government waits 10 years and then increases wages all of a sudden, the shock can be more than some small businesses can handle.
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