Fish processing plant. (Photo Credit: NOAA/Don Mason)

Seafood firms in Alaska assess minimum wage rise effect

Some seafood processing plants of Alaska are considering scaling back their workforce given the proposals to change to state’s minimum wage structure.

This ballot initiative – which President Obama and Democrats have routinely but unsuccessfully attempted to push at the federal level -- was supported by voters in Alaska, Arkansas, Nebraska and South Dakota, The Fiscal Times reported.

However, the sector’s entrepreneurs have not welcomed the initiative.

In Alaska, for example, where the seafood industry employs the largest number of low-wage workers in the state, companies are already preparing to cut jobs in anticipation of the new law.

“We’ll have people who, as they retire out of the industry, we just won’t replace them,” remarks plant manager Don Goodfellow of Alyeska Seafoods, a subsidiary of the Japanese Group Maruha Nichiro. “Machinery will take over a lot of those jobs,” added the entrepreneur in statements to KUCB Unalaska informed.

Meanwhile, the manager of human resources of UniSea, the largest processing firm in Unalaska estimates that the implementation of the established wage increases in the recently voted initiative would involve a cost of up to USD 3.5 million. This could force the company to cut some jobs.

Raising the minimum wage has traditionally been a contentious issue because of the way it could impact businesses as well as consumers. Opponents are usually smaller businesses and firms that employ mostly low wage workers – businesses that say they can’t afford the added costs of paying their workers more.

“I would expect it would impact smaller businesses that are less able to absorb shock to their system,” Labor & Employment attorney Brett Coburn stressed.

All in all, experts have found no historical evidence that minimum wage increases actually result in substantial job loss.

Earlier this year, the Center for Economic and Policy Research studied the 13 states that had raised their minimum wages to see whether they had experienced a decline in jobs and it found out they had not.

Many businesses who once opposed raising the minimum wage now see it as inevitable—especially as the cost of living increases around the country.

Earlier this month, Kip Tindell, the incoming chairman of the National Retail Federation (NRF), that has long-opposed minimum wage hikes, said he’s working “to get the NRF to moderate its view on that.

Nevertheless, Coburn concluded that a lot of firms have been adjusting their business models and added that it will likely result in some layoffs as well as costs being passed onto the consumer.

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