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There is one fact about minimum wage that is inescapable; any raise in the minimum wage will have to be paid out in some way. Businesses that have pay their workers more money will face increasing costs that usually have to be paid through raising prices if employment is to be kept the same. That is what the local government for the city of Reno has discovered about the recently enacted law raising the minimum wage.
The state of Nevada passed a law to increase the minimum wage gradually starting with a 75c increase in July. The law raises the minimum wage to $11 by 2024 for employees who get health insurance through their employer, and $12 for those who do not. But this change has presented an extra cost of $2.7 million that has to be covered in the Reno’s parks and recreation budget for the next 5 years. The parks and recreation department needs to raise the wages of the lifeguards and coaches that it employs.
Private companies have more leeway in regards to cost-cutting measures when it comes to minimum wage laws. For right now,
Reno officials are considering whether to address this new reality by raising prices. The cost for seniors to swim could increase from $2.50 a day to $4 daily in 2024. The cost of a daily visit to one of the city’s activity centers could jump from $1 for adults and seniors to $7 for adults and $4 for seniors by 2024. The cost of its before and after school programs may jump, too. The daily rate for the morning program may go from $10 to $15 by 2024.
This of course might lower the demand for recreational services in the city. The city may end up having to cut employment in order to cut costs if demand falls to the point where revenue cannot cover the cost of services. Ultimately the new law will raise costs for people who rely on the services the parks and recreation department offers.