Minimum Wage Increase Trickle Down Effect

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Minimum Wage Increase Trickle Down Effect

By FOX 47 News . CREATED May 9, 2014

Scott Ellis of the Michigan Licensed Beverage Association talks about the "trickle down effect" of increasing the minimum wage.

Ellis notes that an increase in the minimum wage could do more harm than good for small businesses and employees because increasing the pay of the lower-tiered workers would mean a pay raise of other workers, just to make it fair. Additionally, an increase in wages would also affect menu item pricing. Customers could see an increase in prices, and wait staff members could see a decrease in their tips.