Local businesses react to minimum wage increase - KCBD NewsChannel 11 Lubbock

7/24/09

Local businesses react to minimum wage increase

By Brittany Pieper  - bio | email

LUBBOCK, TX (KCBD) - Some workers across the South Plains got a raise Friday as the national minimum wage went up to $7.25 cents an hour. Several local businesses such as restaurants and grocery stores are affected by the increase, but they've known it was coming for awhile and say they were prepared.

"We planned for it in our menu pricing, so yeah, we planned for it in our budget," said David Cea, who owns Caprock Cafe.  He says about 1/3 of his employees make minimum wage. They'll now see a raise of 70 cents an hour.

When minimum wage goes up, Cea has to adjust prices, but because this is the last in a series of minimum wage increases that began in 2007, customers won't see an increase at this time. The restaurant already planned for it when setting prices

Raymond Guerrero is one of the Caprock employees who will benefit from the raise. While Cea says it doesn't affect his business much, it does affect the individuals. "It'll help me because I have a family, and it will help out a lot. It'll bring groceries in the house, pay the rent, pay the bills," said Guerrero. 

United Supermarkets has hundreds of local employees who will benefit from the raise. It does impact their bottom line, but they don't plan to raise prices at this time either. "I don't think we'll see prices rise at all. We have to maintain our competitive advantage everywhere that we can," said company spokesman Eddie Owens. 

Instead, the company will have to make cuts elsewhere. "We have to do our business smarter today than we did yesterday in order to maintain our profitability," said Owens. 

While some consumers getting the raise will have more money to spend, the Lubbock Economic Development Alliance, or LEDA, says it won't have much impact on Lubbock's economy. "It won't make a bit of difference in my opinion. For the people, again, that are on the low end of the wage scale, it'll help some, but we just don't have that many here," says Gary Lawrence with LEDA.

This is the last in a series of minimum wage increases that began in 2007.

©2009 KCBD NewsChannel 11. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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