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Mayor: Pay hike may cause worry for some

Lawrence County and Monticello employees will not be muchaffected by federal and state efforts to raise the minimum wage,but some city officials worry about the potential impact of theincreases on the town.

The reason for the expected minimal impact is that most workersare already being paid more than the proposed $7.25 an hour, whichwould be an increase from the current $5.15 an hour.

“I don’t think we have any making less than that,” said LawrenceCounty Comptroller Kelly Miller of the proposed higher minimumwage. “The lowest we have would be about $7 right now for part-timework.”

Miller said he did not have an estimate of the average hourlywage for the county’s approximate 80 employees, but was reasonablycertain it exceeded $8 an hour.

The situation in the city is much the same, said Mayor DavidNichols. He estimated only three or four of the city’s 19 employeesmake less than the proposed higher minimum wage.

Should the bill pass into law, Nichols said, he can foresee thetown having to follow one of two paths to make immediateadjustments. The town could amend the budget to account for theraise or possibly not fill a vacant position in the streetdepartment to free up funding for the raises.

Whether that position would be reopened next budget year woulddepend on the town’s finances, he said.

“It would all depend on what else is going in the Legislatureand what we have when we’re preparing next year’s budget,” he said,referring to a controversial debate on state bills to lower grocerytaxes.

Nichols has estimated in the past that grocery taxes account foran approximate 10 percent of the entire town budget.

In addition, Nichols said all employers would also feel thepinch from “hidden” costs associated with a pay raise.

“Two things people haven’t really considered is that not onlydoes it raise the pay, but also their benefits. So, it’s an evengreater cost to the employer,” he said.

A raise in pay means employers must also pay higher pensionrates and Social Security matches, Nichols said. The two extrafinancial demands on what are often already tight budgets for smalltowns and privately owned businesses could be substantial, hesaid.

“As a former business owner, labor was my biggest expense,”Nichols said. “I would probably not fill a position that becamevacant because of this. I can see this possibly causing higherunemployment rates.”

Another option for small businesses, the mayor said, is to raiseprices, which is something no small town business wants to do.

“It’s already hard for a small town business to be competitive.This would put them at even further disadvantage,” Nicholssaid.

However, the mayor said there are some possible benefits to thestate economy with raising the minimum wage, too. Increased wages,he said, may pull some people from the state and federal assistancerolls, such as welfare and food stamps.

“It’s hard to say how this will shake out,” Nichols said.