Wednesday, April 30, 2014

Small Business and Minimum Wage

Raising the minimum wage has been a topic of controversy this year.  Co-Editor Fran Quigley gives us important information on small business owners who support paying employees a living wage. 

Professor Quigley writes:

Although a substantial majority of Americans support increasing the federal minimum wage, some myths endure about the supposed dangers a wage hike would bring. The most insistent arguments are often put forward by so-called experts generously supported by multi-national corporations who pay their workers sub-poverty wages.

            There is the notion that raising the minimum wage will substantially decrease the number of jobs available. (Decades of research on the question has shown otherwise.) There is the idea that low-wage jobs are just teenage way stations along the path to a livable wage. (In our increasingly service-oriented economy, adults are usually the ones holding the poorest-paid jobs.)

            Some corporations even trot out a free market argument, skipping over the inconvenient fact that taxpayer-funded food and healthcare assistance is necessary to prop up the households of their employees.

            But one argument that may resonate most with Americans is the notion that a minimum wage hike will harm small businesses. As it turns out, one important group disputes that position: owners of small businesses.

            The organization Small Business Majority recently conducted a poll that showed that two-thirds of small business owners support increasing the minimum wage and adjusting it regularly to account for inflation. An even larger majority of small business owners reported already paying their workers salaries greater than the current minimum wage.

      The McDonald’s and Walmart business model may be built on exorbitant CEO salaries and referring their front-line employees to the welfare office, food pantries, and plasma banks. But that is not the way Mom and Pop stores want to operate, in part because low-paid workers have such limited purchasing power. “The biggest problem for Main Street businesses is lack of customer demand,” Business for a Fair Minimum Wage director Holly Sklar says. “Corporate profits are at their highest since 1950, as a percentage of national income, while the share going to employees is near its low point. We can’t build a strong economy on a falling wage floor.”

            Many Indianapolis business owners feel the same way. Recycle Force, a not-for-profit enterprise that employs formerly incarcerated men and women to recycle electronic waste, announced in February that it would be raising its own minimum wage to $10.10 per hour. That matches the target rate for the Fair Minimum Wage Act pending in Congress. It is also the hourly wage that President Obama recently ordered to be the floor for employees of federal contractors.

            Pizza King Indianapolis franchise owner Aaron Schaler has joined the cause, pledging to pay all of his workers over $10 per hour. Schaler announced the plan on the company’s Facebook page, saying “Not only do people deserve to make a living wage, but happy employees are productive employees.” Customers responded, saying the policy made them more likely to order their pizza from a company that treats its workers well.

            Gregg Keesling, the president of Recycle Force, has also received positive feedback for his wage hike decision. Small businesses benefit when their employees can sustain themselves on their take-home pay, Keesling says. “Non-profit and social enterprise business leaders should be at the forefront of this (minimum wage increase) movement. Raising our wages is smart for families, smart for crime prevention, and smart for business and growing our economy.

            “Most importantly, it is the right thing to do.”   

             

http://lawprofessors.typepad.com/human_rights/2014/04/small-business-and-minimum-wage.html

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