Posted 7:14 PM 1/2/2012 : Minimum wage increase could affect small businesses
Michael Ezzat and his wife have been in business nearly thirty years. The couple owns Westside International Restaurant and Deli Mart in Colorado Springs. This year they were hoping to hire workers so they can retire. But because of the minimum wage increase, they can't afford to.
"I would love to hire people. I've been in business for so long and its time for us to relax a little [and] not work as hard as we used to. But when it comes to the new laws of labor and we have to pay a lot more money, somehow we can't afford it right now", said Michael Ezzat.
In the past three years consumers have seen an increase in many items including food, clothing, and gas. To help offset rising cost of inflation, Sunday the state raised the minimum wage 28 cents. Workers are now paid $7.64 which adds up to roughly $582 dollars more a year.
"For people above the minimum wage it doesn't sound like much but for people at the minimum wage, this is a big difference", said economist Fred Crowley.
In fact, it's the largest increase since 2006, when legislation linked the state's minimum wage to inflation.
Crowley says the increase will push small business' to make tough choices.
"From the business perspective on how to pay [the increase] they're going to try to cut cost cause its hard for them to try to past that cost of higher wage on to its customers", said Fred Crowley.
The increase could also force small businesses to cut hours or eliminate workers. Many small businesses have been forced to shut their doors because of the poor economy. But despite the offset, Ezzat is remaining optimistic.
"I have a feeling things are going to get better. I don't know why, but I feel like things are going to get better", said Michael Ezzat.