EVANSVILLE, IN (WFIE) - Workers earning minimum wages will soon have extra money in their pocket.
The federal minimum wage goes up this Friday, along with minimum wage in Indiana, but is the increase good for business?
The extra money has to come from somewhere, and for small businesses, the increase will take its toll.
That's true at Showplace Cinemas, who will spend a lot more money out of their budget paying their employees next year.
Two years ago, Indiana's minimum wage stood at $5.85 per hour. Last year, minimum wage went up to $6.55, and Friday, it will rise again to $7.25. That's an increase of $1.40 per hour, per employee, in just two years.
For workers, it means a raise, but for their employers, it's more cash going out.
Showplace Cinemas employs 150 workers at minimum wage, and according to general manager Mick Stieler, that adds up to $100,000 extra each year, a large sum they'll be dishing out.
"The way we have to compensate is to raise prices or cut back the hours of our employees," Stieler said.
That means, the buck could end up getting passed to you, the consumer.
"Any time you raise your cost, you know, as a businessman, you have to do something," Stieler said. "You just can't keep dishing it out."
For restaurant employees, it's a little different.
Employers must pay servers at least $2.13 an hour, anticipating tips will make up the rest.
If not, employers are required to pay the difference.
It's good news for workers, but the money trail could end up affecting them in a negative way too.
Stieler said since the government is mandating the raise, it doesn't give incentives for employees to work hard for one.
"When everybody gets a raise, you can't reward the harder workers," Stieler said.
Stieler said there is assistance if you employ students that will allow employers to pay 85 percent of minimum wage, but he said that it still adds up to big money in the end.
Kentucky raised their state minimum wage about a month ago.
Indiana, along with the federal minimum wage increase, takes effect Friday.
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