As of April 1st, 2019, the minimum wage will be increased from $16.50 an hour to $17.70 an hour. Looking ahead, the minimum wage is said to be as high as $20 an hour by 2021. What does this mean for business? The change is more likely to impact smaller companies, especially those with a majority of their staff on minimum wage. Larger companies may be able to absorb the costs more efficiently. In some cases, businesses have reported that the increase in minimum wage will usher in an increase in their prices.
The hospitality sector is one that is likely to be affected as there are generally a large amount of employees on minimum wage. On top of this, many smaller cafés and restaurants are in prime position to carry the weight of the change in wage. The Restaurant Association revealed that only 40 percent of hospitality employers believe that they can absorb the costs following the change. Furthermore, 69 percent of employers said that their menu’s prices would increase as well.
It will be interesting to see whether the increase in wage leads towards a better quality of life for those on minimum wage, or if job cuts will trump the increase and make it harder for people to get jobs that pay minimum wage.