Local businesses react to statewide minimum wage increase

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(ABC 6 News) – Since the pandemic, many local businesses have had to cut back and cut costs just to get by. But there’s one cost they can’t cut, paying their workers. The Minnesota Department of Labor and Industry announced Thursday morning that it’s raising the minimum wage in the new year.

"We’ve had a lot of our employees for 5-10 years, so they kinda know what’s going on, and they understand," said Carlisle Corson, the owner of Trailhead Inn.

He knows that raising the minimum wage is a complicated situation for everyone.

"We’ve been making some cutbacks and tightening our belt up."

The Minnesota Department of Labor and Industry announced that on January 1, 2022, the minimum wage will increase from $8.21 to $8.42 an hour for small businesses. For large businesses, the wage will increase from $10.08 to $10.33 an hour. Corson said he’s doing everything he can to keep lodging rates at the same low price.

"We’ve had our same lodging rates for the past couple years. We have to pay our employees. So again, those costs will be passed on to the customers, unfortunately," said Corson.

The Department of Labor says the wage increase is to keep up with inflation, and local business leaders say they’ve known it was coming for a while.

"We kinda knew it was coming. There’s a lot of uncertainties of how that will affect some of our businesses in town," said Gabby Kinneberg, the Preston Chamber of Commerce Director.

But, what is clear is that local businesses are still experiencing a workforce shortage.

"You throw the minimum wage increase, and then all the other workforce struggles that we’re going through right now. It’s just another thing to worry about among the other things," said Kinneberg.

Corson, and many other business owners in town, were already planning on increasing wages to attract workers.

"Since there is a shortage of workers, we’re having to pay a little bit more anyway."

Corson said the Trailhead Inn will make it through these difficult times, but he’s not sure if these cutbacks are just the new normal.