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Oregon's minimum wage set to go up Friday, small businesses wary of impact

FILE -- An audience member wears a sticker on his back opposing wage increases during a public hearing on proposals to raise the minimum wage at the Oregon Capitol Building in Salem on Thursday, Jan. 14, 2016. (Gordon Friedman/Statesman-Journal via AP, File)

Small business owners in Oregon say they are worried about how the first of a series of minimum wage increases will affect both their profits and their employees.

Oregon's minimum wage on Friday jumps from $9.25 an hour to $9.75 in Oregon counties with a mix of urban and rural areas. It is the first of seven annual increases that will raise the minimum wage to $13.50 in the summer of 2022 in mixed areas, $14.75 in Portland and $12.50 in nonurban areas.

In Benton County, owners of restaurants, farms, retail establishments and nonprofits say the increased labor cost will be hard for their businesses, the Corvallis Gazette-Times reported.

"It's going to impact us a lot. Half of our employees are minimum-wage folks," said Kaymarie Novak, business manager of Novak's Hungarian Restaurant in downtown Albany.

Janet Steele, executive director of the Albany Area Chamber of Commerce, said it's possible the increased labor costs will be passed on to customers with meals, products and services coming with a higher price tag. That increased cost will be compounded as goods make their way to market. If the price of flour, milk and eggs increases, the price of bread will increase by the sum of those ingredient's increases.

Mark Martin, who owns the Calapooia Brewing Co. in Albany, said he is a huge proponent of paying a living wage, but he's going to have to increase prices because he will be facing higher prices on goods and from distributors thanks to the wage increase.

"I think it's a great thing for people who work minimum-wage jobs, but it's going to hurt the small businesses like us," Martin said.

While retail businesses can increase the price to compensate, Denver Pugh of Pugh Seed Farm near Shedd said agriculture is not left with much of a choice. His farm has no control over its two biggest expenses, and if he tries to raise the price, customers may just buy elsewhere.

"We're price-takers, not price-setters, so I think agriculture is going to get hit the hardest," he said.

In terms of employment, the Oregon office of Economic Analysis reported that there are expected to be 40,000 fewer jobs by 2025 than would have been created without the minimum wage legislation. According to the report, the office is not predicting job losses, but rather a slower period of job growth.

(Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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