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Senate Combines Wage Hike, Tax Breaks

Minimum wage may jump to $7.25 in two yearsWASHINGTON, D.C. — Coin laundry operators may be paying a new minimum wage in the near future. The Senate has voted 94-3 to combine a minimum wage increase with more than $8 billion in tax breaks, a concession to republicans who would not support the wage hike without incentives for small businesses.The minimum wage bill is shaping up as a battle between the House and the Senate. The House in early January overwhelmingly passed a bill that would increase the minimum wage from $5.15 to $7.25 in three steps over two years, but House democrats demanded a bill free of a tax attachment, and no tax breaks were included in the bill. However, the minimum wage bill stalled in the Senate as lawmakers argued over tax breaks for small businesses that would be attached to ensure republican support. The Senate democrats tried to push the House version through, but were six votes short of keeping that version of the bill moving.Senate and House leaders must now compromise in order to get the first federal minimum wage increase in a decade. If passed, the bill would raise the minimum wage by $2.10 per hour in increments over two years. The $5.15-an-hour minimum would increase 70 cents 60 days after the legislation is enacted. Another 70-cent increase would occur a year after the first, followed by another a year after that.A rise in the U.S. minimum wage would have little effect on small-business labor costs, according to a recent survey of small-business owners conducted by Discover Financial Services. According to Discover, 70 percent of the survey respondents said an increase in the minimum wage to $7.25 an hour would have no effect on labor costs. Twenty-eight states plus the District of Columbia already have a higher minimum wage than the federal threshold.How much will this affect coin laundries? Slightly more than 80 percent of the respondents to a recent Wire survey have at least one attendant. A hike in the minimum wage may lessen the chance of unattended storeowners from ever hiring someone. Even before this potential legislation, unattended storeowners were lukewarm, at best, when discussing the possibility of ever bringing in attendants (see chart).What’s interesting is that while operators don’t have many employees, “dealing with employees” traditionally is listed as the industry’s No. 2 “business headache,” according to the annual American Coin-Op State of the Industry survey.While owners may not like dealing with employees, 55 percent of the respondents “absolutely” trust attendants when it comes to dealing with money, while 36 percent of the owners trust attendants, but “not 100 percent.” When asked how long the typical attendant worked at the laundry, the most popular responses were: more than two years (55 percent); more than a year (26.7 percent) and six months to a year (13.3 percent).

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