But the server position at Jane's Gourmet Deli & Catering in Lafayette, which pays the new rate of $5.85 per hour, becomes more attractive than jobs at many restaurants because employees share 100 percent of the gratuities left by customers.
"I've worked as a server in other places, and that's one of the things that drew me to Jane," said Ryan Wellner, who has worked for Ausman-Mudawar for the past seven years. "We're like one big melting pot. We put all our tip money in a bucket and at the end of the day we divide it equally.
"Jane is almost like a surrogate mother. We all pull together and we're always leaving here at the end of the day with money in our pockets. Jobs are scarce, and I'm the father of a 1-year-old son, so whatever extra money we get, the better off we'll be."
The Indiana General Assembly passed a law earlier this year that ties the state's minimum wage to the federal rate, which increases today by 70 cents per hour.
Employers of workers who receive tips must pay them at least $2.13 an hour, in addition to their tips. And if the tips do not add up to $5.85 per hour, employers must make up the difference.
"We've always paid the minimum wage, plus tips, so by doing that we've been able to keep staff a longer period of time," said Ausman-Mudawar, who opened her business 15 years ago. "When people feel like they're being treated fairly they stay. That's the biggest catch to holding onto staff -- treat them in a fair way."
Michael Alter, president of SurePayrollInc., a Chicago-based firm that offers outsourced payroll services, anticipates the minimum wage increase will have very little effect on small businesses in the Hoosier state.
"Our research suggests that very few small businesses pay the minimum wage and an even smaller number consider the increase to be an issue for their businesses," said Alter. "It is viewed by most small businesses as a nonissue."
Eventual impact
Co-sponsors of the legislation said the hike in the minimum wage will favorably impact approximately 36,000 Hoosier workers.
"Those who benefit the most will be the thousands of Indiana workers who have no powerful lobbyists speaking on their behalf," said state Rep. Joe Micon, a Democrat from West Lafayette.
"The increase won't be a large burden on business, yet the extra income can help families, particularly single-parent families, which studies show are specifically who you find in minimum wage jobs," said state Sen. Ron Alting, a Republican from Lafayette. "It was greatly needed. The people it does affect are the ones that need it the most."
With approximately 3,900 full- and part-time employees, Wabash National Corp. in Lafayette is one of the area's largest employers. The starting salary for temporary workers exceeds $10 per hour.
The company's senior vice president for human resources, Tim Monahan, expects the boost in minimum wage will eventually have a trickle-up effect on all businesses.
"There should be minimal impact on us. But over time, there probably will be some future impact in rollups for everyone," Monahan said. "There will be some costs in the whole economy that will roll up."
Waiting 10 years
Businesses have few options as they look for ways to cover the increased pay that minimum wage workers will be receiving.
Those choices include absorbing the added expense, cutting back on employees or the number of hours they work or reduce hours of operation to save on costs.
"In today's environment, price increases to cover increased costs are rare," said Alter of SurePayroll. "As a result, small businesses are forced to either 'eat' labor increases or figure out how to get more productive -- either from better processes and technology or from getting more from their existing workers."
Nancy Guyott, executive director of the Indiana AFL-CIO, would like to see the state's lowest paid workers earning more than the new rate of $5.85 per hour.
"We finally ended a long period of no wage increase for our most vulnerable workers. We had 10 years without any increase in minimum wage," Guyott said. "During those 10 years there were increases in productivity.
"We think the minimum wage could and should be even higher than this amount. This is the amount that was feasible at the time. It affects a significant portion of the working population. A lot of those people are supporting families and sending their kids to school."
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