Local business officials say the recent increase in the minimum wage likely will have little effect on wages in Utah Valley.
The reason: Most local employers already pay more than the minimum rate.On April 1 the federal minimum wage increased from $3.80 an hour to $4.25 an hour. The $4.25 wage became Utah's minimum wage also last week when the State Industrial Commission voted unanimously to adopt it.
Larry Rhodes, manager of the Provo Job Service, said most job openings listed during the first quarter of this year were for more than the minimum wage. He attributes that to Utah Valley's low unemployment rate and high demand for good employees.
"Right now there is certainly a healthy competition for good workers, and wages are reflecting that."
Officials from Sears Telecatalog and NuSkin, both major employers of local young people, agree with Rhodes. Both pay more than minimum wage in order to attract quality workers. They say the local labor market will not allow them to pay less.
"We've found that things are becoming quite competitive and we've had to pay a wage which is that or higher anyway," said Jason Chaffetz, NuSkin public spokesman.
Niel R. Nielson, human resource manager at Sears Telecatalog, said Sears also pays more than minimum wage to attract good workers. Sears would increase the wage it is currently paying only if the number of quality job applicants started decreasing.
"As long as we can get the people we want and need, we probably won't see much of a change. If we find it's affecting the quality of people who are applying, then we'll probably have to do something," Nielson said.
Ron Morgan, president of the Utah Restaurant Association, said most local restaurants also pay more than the minimum wage because of the shortage of good workers. However, some restaurants in smaller communities pay only minimum wage. To compensate for the increase, those restaurants will either have to increase menu prices or reduce their labor force.
"They'll maintain their labor costs by cutting their labor force," he said.
Steve Densley, president of the Provo/Orem Chamber of Commerce, said businesses affected by the increase will have to raise prices or cut back on employees. The increase will not improve the standard of living locally because most who will be affected by the increase are not supporting families, he said.
"I don't think it does anything but move the whole inflation rate up," Densley said. "I think it will cost more jobs than it's really worth."One local company that will feel the impact of the wage increase is Seven Peaks Resort. Paul Mix, manager of the water park, said his payroll will increase by more than $100,000 this year. To compensate for the increase, the price of a day pass will go up 50 cents.
"The problem is that it just comes off the bottom line. There is no way we can absorb that kind of an increase without making changes," Mix said.
Normally, Seven Peaks hires workers that are about 15 and 16 years old. However, with the increased wage Mix said Seven Peaks may start hiring older workers.
Rhodes said most businesses have expected the increase because the minimum wage increased the same amount in 1990, and they were prepared for the change.
"There's no doubt that some companies will be affected by the increase. But I think generally it will be absorbed," he said.
Utah Valley wages
"Right now there is certainly a healthy competition for good workers, and wages are reflecting that." - Larry Rhodes, Provo Job Service manager.
But one company that hires a lot of teenagers, Seven Peaks Resort, will see its payroll increase $100,000 this year because of the minimum-wage increase. So ticket prices will go up 50 cents.