After facing the cost of increasing gas prices, East Peoria business owners now find themselves facing a state minimum-wage increase as well.

“I think it’s going to be very difficult on small businesses, particularly with the increase of gas prices,” Barb Filipiak, director of the East Peoria Chamber of Commerce, said.

Filipiak said raising the minimum wage causes a ripple affect, such as higher personnel costs and, eventually, employers offering fewer jobs because of those personnel costs.

For workers who earn minimum wage, Filipiak said the increase is viewed positively, since they receive a larger paycheck.

Filipiak said there is a difficult balance between increasing minimum wage and having personnel costs affect the prices people pay for food, groceries and other items.

Kathy Arnold, who owns Central Illinois Courier with her husband, Ray, said they would like to pay employees more but are unable to because of the current gas prices.
Unlike some companies, Arnold said they increased workers’ salaries before the new minimum-wage increase went into effect July 1, because of the cost of gas.

“We start off at $9 an hour and already paid above minimum wage before this increase,” Arnold said. “I know we have a few guys who drive for us that used to put in $20 and it would get them by for three days. Now, it doesn’t even get them half of that.”

Arnold said they do extra deliveries for Fed Ex, which is also struggling with drivers.
“If it impacts a company their size, you know it’s going to impact us three times as much,” Arnold said.

Despite the increased cost for employers, Arnold said she supports increasing the minimum wage.

“I think it’s probably needed, but with fuel costs, it’s just getting hit with two things at once,” Arnold said.

Marty Green, an economics teacher at East Peoria Community High School, said there are two ways to look at the minimum-wage increase.

“For business owners, it cuts into profits and makes it difficult to hire new people or to keep employees,” Green said. “On the other hand, for those who have a minimum-wage job and are able to keep their job, it’s a good deal.”

Green also said the increase in fuel and labor costs are both tough for business owners.

“Perhaps it’s not the best time for a wage increase,” Green said.

Despite concerns about the wage increase’s impact, not all East Peoria business owners see it as a negative change.

Bob Johnson, owner of Pleasant Hill Antique Mall and Tea Room, said he does not think the wage increase will impact his business, even though his employees start off at minimum wage because he gives  them raises.

“I don’t think it will hurt anyone,” Johnson said. “I think that it is a good thing because it will give people a little more money to spend on groceries, gas or other things.”

Unlike Johnson, Peoria Heights business owner Cindy Neal said she is against the minimum-wage increase.

“I really don’t care for government telling businesses how much to pay people,” Neal said.

Neal, who owns Express Personnel Services and is a member of the East Peoria chamber, said she pays above minimum wages for her employees because of the demand for quality people.

Gov. Rod Blagojevich signed a law in December 2006 stating a 25 cent minimum-wage increase would go into effect every year until 2010, when the state’s minimum wage becomes $8.25 per hour.

Since some states have a lower minimum wage, Neal said businesses that pay minimum wage might move to a neighboring state, where they can pay employees a lower wage.

“Raising the minimum wage artificially inflates things, and people have to pay more for items because employers are paying higher wages,” Neal said.

Neal said another factor of increasing minimum wage is that employees who already make around $9 an hour also want a higher wage.