Local businesses weigh in on new minimum wage law - KWWL - Eastern Iowa Breaking News, Weather, Closings

Local businesses weigh in on new minimum wage law

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Some in Iowa may be losing their raises after a new state law bans local governments from raising the minimum wage. 

It reverses the wage bump several local counties have put in place including Linn County where the wage recently went up to $8.25 an hour. 

The raise went into effect January 1st, now just a few months later it's been decided the minimum wage will be $7.25 statewide. 

At Riley's Cafe in Cedar Rapids there will be no turning back when it comes to the minimum wage increase put in place by Linn County.    
 "We are not gonna take it back, we are not going to take it away. To me that would be a disincentive to people who work really hard for us," says Owner Richard Pankey. 

Pankey owns nine restaurants in the county and employs around 300 people.

Although he is sticking with paying his employees more, he admits they have had to make adjustments for the higher wages. 
"That meant a net cost to us of about $3,000 in additional cost for us to increase the wages. And you know it's something that we have to absorb and perhaps raise our prices a bit just to compensate for that," Pankey says. 

Across town a Co-Owner of Brewhemia tells us he agrees with a statewide minimum wage. 
"I think it should be statewide and not patch worked," says Brad Danielson. 

He says his employees are only making minimum wage while they are going through the training process. 

As for future hires he says they do plan on starting them at the statewide minimum wage of $7.25 while they train. 
  "I don't think there are any in that training process right now, we wouldn't drop them back down. But for somebody starting out from this point on we probably would drop back down to the $7.25," says Danielson. 

Employees at Riley's Cafe and Brewhemia make tips in addition to their wages. 


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