BY O.J. EARLY
The minimum wage debate rages on.
Following President Barack Obama's announcement in his State of the Union Address on Tuesday night that he would sign an executive order to raise the minimum wage for some federal contract workers, the familiar battle began.
The gist of the argument:
In general, supporters of the raise contend that a higher minimum wage benefits the lowest-paid workers and helps them live above poverty level without affecting employment. Supporters argue that it is "the right thing" to do.
In general, opponents of the raise believe that raising the minimum wage discourages employers from hiring -- or in some cases even retaining -- entry-level workers.
Opponents therefore believe raising the minimum wage actually hurts the lowest-paid workers -- who are also often the youngest, least-experienced and least-skilled employees.
CURRENT MINIMUM IS $7.25/HR.
"Let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $10.10 an hour," Obama told the nation Tuesday night in his State of the Union address.
Tennessee, like five other Southern states, has no self-imposed law declaring what the minimum wage is in Tennessee.
Federal law, however, currently mandates a minimum wage of $7.25 an hour: a legal minimum which also applies in Tennessee.
Obama's executive order will apply only to workers covered by new federal contracts, jumping their pay from $7.25 an hour to $10.10 an hour, the Associated Press reported.
FORMER EMPLOYER MAKES CASE
One former local business-owner who has years of experience hiring minimum-wage employees thinks that raising the minimum is a bad idea for low-level employment and for the economy in general.
"The idea out there is that these people [owners of businesses that employ many lower-paid staff members] make millions of dollars and can just pay everyone $10 an hour," said Mark Suttle. "But we have to pass it on to the customers."
Suttle once owned five area McDonald's restaurants -- four in Greene County, another in Hawkins County.
Product costs will jump when a mandate to raise minimum wage comes, he said.
A meal at a restaurant that now costs $5 would increase two or three dollars, he said.
"It causes inflation ... It comes back to you, the customer," he said.
And it's not just about product costs rising, Suttle said.
Employees who have climbed the job ladder, he said, will no longer be rewarded for their progress.
"The people who have worked hard to get $10 an hour -- you put him right back down at the bottom," he said.
According to Suttle, many businesses, large and small, would have a difficult time shouldering a major increase in hourly wages.
"Unlike the government, there has to be customers to pay for this. There's no business out there that I know of that just has huge cash flows," he said.
"There is a cost occurrence just to survive in business today."