by Lisa Tome
Last week the Maryland Legislature became the second state to adopt the $10.10 minimum wage hike in the country.
The change will be incremental.
On January 1, 2015, the minimum wage will increase from $7.25 an hour to $8 per hour. In July of 2015, it rises to $8.25 per hour. In July 2016, it increases to $8.75 per hour. In July 2017, it hits $9.25 an hour. In July 2018, the wage will hit the $10.10 per hour.
For Chris Shelton, it hurts.
Shelton, owner of the seasonal business, Captain Chris' Crab Shack, south of North East, employs 32 people.
He said he likely won't feel the pinch this year, but it will impact his long range business plan. He said the higher wages will mean increases across the board in his payroll with the employer matches to Social Security, FICA, and Medicare.
He also said the increase will mean raises for everyone. He said he can't pay a management staff member $15 an hour and start a newer employee at the higher rate. "I will have to adjust everyone. I am concerned with the net effect," said Shelton.
Since Shelton's main business is crabs, which are considered a "luxury" by many, he is worried that business will be impacted.
"I don't have the ability to raise my prices. You have options. You absolutely do not need crabs to survive," he said.
He said that big business isn't going to feel the impact of the minimum wage increase as small businesses will. "The net effect is that it falls on the shoulders of small business. It's absolutely going to cost jobs. I don't believe we will see a tremendous impact this year. But you have to plan a business three to five years out," he said.
Shelton already deals with a business that is dependent on weather, nature, and the economy. "People will be paying more for necessities and they will have less disposable income," he said.
As a business owner, he has already been impacted with tax hikes. The liquor tax was increased to nine percent. Sales tax was raised to six percent.
"Where does it stop?," said Shelton.
"At the end of the day a business person is not going to work for free. Business people become the same as discouraged workers. No person wants to have to eliminate someone's job. We actually care about our employees," he said.
Shelton said he offers entry level jobs to young people which provide them with a foundation for the work world. Some of those jobs may be eliminated in the long run.
"We are teaching life skills to entry level people. The net effect of this is way more than $10.10 an hour. This means the elimination of jobs for 16, 17, and 18 year old kids," he said.
Shelton said this will also impact the community. His business contributes to about 100 charitable organizations each year - band boosters, fire companies, fundraisers, and more. "If my profits decrease, charitable giving also decreases," he said. "This touches everything. It touches every business that I do business with.”
He began discussing this issue with a cook at a local chain restaurant. The woman said that she started working at her job in 2003, earning $7 per hour.
After 11 years at her job, she now earns almost $10 an hour. She told Shelton she would be "upset" if someone new was hired at the new minimum wage.