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Restaurant owner says raising minimum wage will squeeze small businesses

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Buffalo: Restaurant owner says raising minimum wage will squeeze small businesses
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As lawmakers on the state and federal levels debate whether or not to increase minimum wage, a local small business owner says the proposals raise some concerns. YNN's Antoinette DelBel reports.

NIAGARA FALLS, N.Y. — Jack Adly opened Venus Greek & Mediterranean restaurant on Pine Avenue in Niagara Falls just three months ago.

He says raising the minimum wage from $7.25 an hour to $9 would be good for his employees, but would hurt his bottom line.

"Small businesses don't really make that much,” he said. “Food costs and everything else is going extremely high.”

Adly says with the cost of food also going up, combined with an already tough economy, something's got to give.

"I would have to cut down on something,” he said. “Whether it's employees, it's going to be one way or another. I'm either going to cut down on employees or I'm going to raise all my prices up."

While President Obama says raising the minimum wage would help middle-class families get ahead, some disagree, saying it would hurt the economy.

"The job market is very soft, so to increase the minimum wage at this time, I think would put upward pressure on the unemployment rate, which is already fairly high at 7.9 percent on the national level," said Kristine Principe, an assistant economics professor at Niagara University.

Principe says businesses wouldn't be able to afford as many employees and therefore wouldn't hire as many. She says a higher minimum wage would cause a trickle-down effect on the economy.

"While it is true that those who would retain employment with a higher minimum wage would have more disposable income, that very well could be more than offset by the drop in spending from those who would no longer be employed," she said.

As for Adly, he says his handful of employees, who are already making a little above minimum wage, would be tough to let go, leaving him with only one other option.

He said, "If my overhead is going to be high because of the employees, I'm going to have to raise my prices up to be able to stay in the business."

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