Business owner says Nebraska’s minimum wage increase will have unintended effects

LINCOLN, Neb. (KLKN) – Starting Jan. 1, Nebraska’s minimum wage will increase to $13.50 an hour.

Voters overwhelmingly passed an initiative in November 2022 raising the wage $1.50 each year through 2026.

There will also be an annual cost-of-living increase beginning in 2027.

David Chapin, the owner of Willmar Electric, said although the minimum wage increase is not a huge concern of his, it will affect the overall job market.

“We’re not heavily impacted by it because our entry-level wages are quite a bit higher than the minimum wage, but it does make an effect anytime you raise the minimum wage,” he says. “People at the entry level with any company start to think about it and factor that in on their choices.”

Data from the Nebraska Department of Labor shows most industries already pay more than $13.50 on average for entry-level jobs.

But workers in food service, personal care and sales will see a pay raise.

Tipped employees will continue to make $2.13 an hour, and employers will be responsible for ensuring that wages and tips combined equal the new minimum wage.

Although this will be a boost for some employees, Chapin said the minimum wage increase could result in fewer jobs.

“Some of the people that I talk to that run small businesses, it just means they’re going to have fewer employees and they’ll just do more themselves,” he said. “They will cover more of the hours inside of their retail shop themselves instead of having to pay more by the hour to more people.”

Chapin also said the increase in costs for businesses will mean higher prices for customers.

“What you see are people who, again, have agreed to do it, and for a certain price, and the government should stay out of it,” he said.

Those who support the increase say that many people have to work multiple jobs to get by nowadays and that raising the minimum wage will give them more time to spend with their families.