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Minimum wage increase means little for Midland
by Kathleen Thurber
Midland Reporter-Telegram
By Kathleen Thurber
Staff Writer
When the national minimum wage increases to $6.55 per hour today, service workers in Midland likely won't even flinch.
"There's not really anybody paying minimum wage around here," said Lupe Villanueva, a manager at the Workforce Network of Midland. "With the labor market here the wages have grown exponentially."
Area businesses reported starting wages usually don't dip below $7 an hour in the Permian Basin, with many starting their hourly workers at more than $9 per hour.
"We're way over that," said Burgers, Fries and Cherry Pies manager Ricky Gonzales, of the minimum wage. "We start everybody at $7.25."
The minimum wage increase is the second of three nationwide, with the next bringing wages to around what most local businesses are already paying at $7.25 an hour. The three wage hikes -- the first of which occurred last summer -- have been the only increases since 1997 when minimum wage was set at $5.15 per hour.
National wage levels always represent an artificially set wage since they're determined without necessarily considering job markets, said Amarillo economist Karr Ingham. For a place like Midland where the market requires companies to pay more than minimum wage to maintain employees, national wage increases have little effect on area businesses and shouldn't mean they have to increase their wages proportionally, he said.
"Of course Midland is a different animal than virtually every other on the planet, " Ingham said.
In other areas, he said, wage increases will often put a strain on business owners and sometimes means they have to cut positions to make up for the increased payroll costs. However, Ingham and business managers said, with most businesses locally in a constant state of hiring, that scenario is an unlikely one here.
Local staffing agencies said they only knew of a few retailers who pay close to the current minimum wage and said they stopped sending employees to those businesses because hourly workers are also needed at places where they can earn more.
In the last quarter of 2007, hourly wages for workers in the food and hospitality industries in Midland County were at $7.55, according to the Texas Workforce Commission, which was an increase from each previous quarter that year.
At Westlake Hardware, manager Mark Ament said they've always paid at least $2 more than the set minimum wage because they know the national wage isn't enough for workers.
Analysts at the Economic Policy Institute agree and say even with today's wage increase, two-person households working full-time at minimum wage will still be below the poverty line.
The debate about whether minimum wage increases are necessary to keep those workers' pay raises proportional to that of higher paying industries or whether such national wage increases are unnecessary because they only affect young or part-time workers will likely continue, Ingham said. But, at the present, it's not a debate Midlanders need to be too concerned about.
Kathleen Thurber can be reached at kthurber@mrt.com.
Minimum wage prior to today: $5.85
Minimum wage as of today: $6.55
Minimum wage as of July 24, 2009: $7.25
Staff Writer
When the national minimum wage increases to $6.55 per hour today, service workers in Midland likely won't even flinch.
"There's not really anybody paying minimum wage around here," said Lupe Villanueva, a manager at the Workforce Network of Midland. "With the labor market here the wages have grown exponentially."
Area businesses reported starting wages usually don't dip below $7 an hour in the Permian Basin, with many starting their hourly workers at more than $9 per hour.
"We're way over that," said Burgers, Fries and Cherry Pies manager Ricky Gonzales, of the minimum wage. "We start everybody at $7.25."
The minimum wage increase is the second of three nationwide, with the next bringing wages to around what most local businesses are already paying at $7.25 an hour. The three wage hikes -- the first of which occurred last summer -- have been the only increases since 1997 when minimum wage was set at $5.15 per hour.
National wage levels always represent an artificially set wage since they're determined without necessarily considering job markets, said Amarillo economist Karr Ingham. For a place like Midland where the market requires companies to pay more than minimum wage to maintain employees, national wage increases have little effect on area businesses and shouldn't mean they have to increase their wages proportionally, he said.
"Of course Midland is a different animal than virtually every other on the planet, " Ingham said.
In other areas, he said, wage increases will often put a strain on business owners and sometimes means they have to cut positions to make up for the increased payroll costs. However, Ingham and business managers said, with most businesses locally in a constant state of hiring, that scenario is an unlikely one here.
Local staffing agencies said they only knew of a few retailers who pay close to the current minimum wage and said they stopped sending employees to those businesses because hourly workers are also needed at places where they can earn more.
In the last quarter of 2007, hourly wages for workers in the food and hospitality industries in Midland County were at $7.55, according to the Texas Workforce Commission, which was an increase from each previous quarter that year.
At Westlake Hardware, manager Mark Ament said they've always paid at least $2 more than the set minimum wage because they know the national wage isn't enough for workers.
Analysts at the Economic Policy Institute agree and say even with today's wage increase, two-person households working full-time at minimum wage will still be below the poverty line.
The debate about whether minimum wage increases are necessary to keep those workers' pay raises proportional to that of higher paying industries or whether such national wage increases are unnecessary because they only affect young or part-time workers will likely continue, Ingham said. But, at the present, it's not a debate Midlanders need to be too concerned about.
Kathleen Thurber can be reached at kthurber@mrt.com.
Minimum wage prior to today: $5.85
Minimum wage as of today: $6.55
Minimum wage as of July 24, 2009: $7.25
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