Houston businesses react to President-elect Joe Biden's minimum wage increase proposal

HOUSTON, Texas (KTRK) -- As President-elect Joe Biden lays out his stimulus proposal, one key plan he has is to raise the federal minimum wage to $15 an hour. Currently, the minimum wage is at $7.25 an hour, which was set in 2009.

"No one working 40 hours a week should live below the poverty line," said Biden while addressing the nation Thursday regarding his stimulus proposal. He added, "That's what it means if you work for less than $15 an hour and work 40 hours a week, you're living in poverty."

ABC13 asked Houston-area business owners and workers their thoughts on the proposal.

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"Hopefully they'll do a gradual increase over the next few years and bottom line, we're going to have to increase prices," said Danny Hart with the Galveston Restaurant Group.

Hart says he already doesn't have many employees that get paid $7.25 an hour, which is the minimum wage in Texas.

Biden's plan also calls for a tipped minimum wage, which has restaurant owners questions that. "Do waiters get $15 an hour?" asks Hart. He adds, "I think that would be fought by the restaurant association big time."

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The owner of Houston franchise the Halal Guys, Masroor Fatany also hopes if the minimum wage is raised, it will be gradual.

"If that's the direction we're heading, then we need to know so we can start planning and working towards that," Fatany said.

University of Houston professor and chair of the department of economics, Dietrich Vollrath said that after years of studying the minimum wage, there are more positives than they would've thought.

The initial idea was that if you increase it, it would be more expensive for employers. However, they've found increasing the minimum wage translates into more spending.

"It's not only a good short-run move, it's a good long-run move," said Vollrath.

In 2021, altogether 23 states raised their minimum wage. Texas did not.

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