800Fund.com Looks At Minimum Wage Increase Impact for Small Business Owners
NEW YORK – Nov. 30, 2016 – Across the country, thousands of protestors are demanding a mandatory minimum wage increase of $15 per hour for low wage workers. As the demonstrations continue to heat up in cities throughout the United States, the country is yet again, in the midst a heated national debate on the increase in federal minimum wage. 800Fund.com understands that few things hit small business owners harder than the wages that they pay their employees.
According to the Economic Policy Institute, 29 states currently have a minimum wage above the federal standard, and 24 cities and counties have minimums above state levels. Cities, such as Seattle, have already taken things a step further by requiring larger companies to increase their minimum wage to $15 an hour by 2018, while smaller companies have until 2021 to comply with the law. Both, California and New York have also passed legislation that would increase mandatory minimum wage to $15 per hour in phases over the next few years.
As demands for a $15 per hour, mandatory minimum wage increase continue, some small business owners are concerned about how wages increases will inevitably impact their own livelihoods. Despite the chorus of critics, there are many small business owners who believe that the increase is actually fair to small businesses that already pay above the minimum rate to their employees, yet are still forced to compete with large corporations who choose to pay rock-bottom wages and bring in billions of yearly revenue. Many small business owners are hopeful that this wage increase will also force large corporations, such as Walmart and McDonald’s, to raise the prices on goods and will, in turn, even out the playing field for small business owners that typically forced to sell the same goods at much higher prices just to survive.
The Center for Economic and Policy Research has a new report out that suggests that the wage increase will create a positive impact for small businesses in terms of employment related costs. The report’s author, John Schmitt, a senior economist at the center, writes: “There are a lot of ways to run a business that is profitable. One way: Take the low road and pay employees poorly, and you have high turnover. So you pay in cost and productivity. Meanwhile, firms that operate on the high road strategy pay more, but in exchange they have…good workers who stick around and have good productivity.’’
Recent studies in states that already have mandatory minimums are reflecting that the overall outlook is positive. After carefully looking at the effects on both businesses and workers, these reports suggest that business will adapt for the better. UC Berkeley researcher, Michael Reich says, “Efficiencies and turnover saving will offset a good part of the wage increases and modest prices increases – spread across all consumers — will cover the rest. The increased consumer spending from the higher wages will generate more business and jobs.”
800fund is a leading merchant cash advance and short-term alternative lender to small- and medium-sized businesses. It is headquartered at 30 Broad Street, New York, NY.
Contact Information: 800fund.com, LLC, 30 Broad Street, 28th FL, New York, NY 10004
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