Minimum wage goes up for struggling small businesses - Must Read Alaska
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Tuesday, January 19, 2021
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Minimum wage goes up for struggling small businesses


The Alaska minimum wage will increase from $10.19 to $10.34, effective Jan. 1, 2021.

It’s a 1.5 percent increase for workers — and a 1.5 percent cut into employers’ bottom line, which may have unintended consequences of having to cut workers’ hours, or even layoffs.

The impact will especially hit those who run restaurants, where workers often earn minimum wage plus tips. Restaurant owners in Anchorage, many of which are struggling to make rent and pay taxes, are currently allowed to open at just 25 percent capacity, hardly enough to make it worth opening the doors, and even harder to find workers who will work such shifts.

In 2014, Alaska voters passed a ballot initiative to adjust the minimum wage annually for inflation.

The Anchorage consumer price index increased 1.4 percent in 2019. By law, Alaska’s minimum wage must remain at least $1 per hour over the federal minimum wage, which is currently $7.25.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • The Alaska Department of Labor made the case last month that Alaska is in a period of deflation. At the same time, food purchased by Alaskans at Fred Meyer, Costco, and Safeway has gone up in price pretty dramatically when measured against prices of 12 months ago; consumers know that even if state economists don’t. Then there is the price of ammunition which has increased fivefold over the past 12 months in many cases. Still, the Marxists among us want government to set wages, but unlike the old Soviet Union our Marxists don’t clamor for corresponding price controls. Government manages everything so well, as we all know.

  • Don’t know about dine in restaurants, but most other minimum wage type employers are offering 12 or more per hour. That’s in Fairbanks. Hard to get anyone for less here.

  • Also impacting Alaska business is the State Unemployment Tax increase. Starting 2021, all businesses will have to pay at least 0.85% more to State Unemployment Tax with no increase contribution by employees.

  • Mandatory minimum wage hikes are a con and government overreach. MMW is contrary to smart economic policy and eliminates jobs and job hours and does not put more money in the pockets of would-be first time employees. These extra costs are transferred to customers who often reduce their patronage. MMW is a fantasy of the left who are unable to understand free market enterprise and liberty. Yet another Socialist endeavor in the good old USA.

    • No, being in Alaska drives prices up. Whoppers down here are get 2 for $5. It doesn’t automatically double the price for shipping. The raping of Alaska continues.

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