What minimum wage hikes mean for small businesses

[SoonerPride]

What minimum wage hikes mean for small businesses
It's not uncommon to hear that minimum wage increases have disastrous consequences, particularly for small businesses. However, economic research into the impact of minimum wage hikes on small businesses suggests that not only are increases not harmful, they might even be beneficial.

Research from the Fiscal Policy Institute examined three years of small business activity in states that increased the minimum wage above federal standards as well as states that did not. These were some of the researchers' findings:

From 1998 to 2001, the number of small business establishments grew at a rate of 3.1% in states with higher minimum wages, compared with a rate of 1.6% in states with lower minimum wages.
Employment grew 1.5% more quickly in states with higher minimum wages.
Annual payroll and average payroll per worker increased more quickly in states with higher minimum wages.
Based on this data, the notion that minimum wage hikes kill small businesses and reduce job opportunities appears false. Instead, raising the minimum wage seems to improve entrepreneurs' abilities to start new businesses and hire new workers. Moreover, additional research published in the Journal of Economic Issues found that minimum wage hikes did not correlate with an increase in small business failures. That research even suggested the opposite is true.

Read on...

https://www.businessnewsdaily.com/8984-increased-minimum-wage.html

[jimfields33]

1. Nothing more current? 22 years ago was a lifetime.

[PoindexterOglethorpe]

2. It has been my observation over the past fifty years or so

that minimum wage hikes are far more beneficial than harmful. I haven't systematically searched for studies, but it does seem as though actually studies show the benefits, and the harm seems to be mainly anecdotal or anticipatory.

[SlogginThroughIt]

4. Doesn't want discussion about

Doesn’t want discussion about what else we can do to benefit small business owners while pursuing $15/hr.

I think it is an insane gamble to not ALSO be developing programs to assist in the transition for businesses below a certain budget. The prevailing wisdom here seems to be “well those businesses will die off and a new one will start” However, all across America, particularly the midwest that hasn’t come to fruiting when small businesses have struggled. What usually ends up happening is main street becomes a ghost town.

[SoonerPride]

5. The data is consistent across any timeline.

Minimum wage increases do not harm small businesses en mass.

Some, perhaps.

But overall the net effect is either neutral or beneficial.

[AllaN01Bear]

3. thank you for sharing this post . i belive that this sounds like a talking point

ive heard that for years and sounds like a attempt to stifle minimum wage increase.

[treestar]

6. Right wingers forget that the people having more money

means they have more money to spend, stimulating the economy.

[SoonerPride]

7. They don't "forget" it. They simply don't "want" poopr people to get more money.

They think being poor is deserved because they are "those people" whether brown, black, immigrant, under educated, etc.

They poverty is a moral failing and deserved.

[Klaralven]

8. Reduce operating hours? From the OA --

How small businesses can absorb the increased costs of minimum wage hikes

Cut expenses: If you live in a state or city planning to raise the minimum wage, you likely have some time to phase in cost increases in modest increments. While preparing to absorb these costs, re-examine every facet of your business. Is there waste or inefficiency you can address that would save you money elsewhere? Consider aspects like energy consumption, surplus inventory and service contracts. Cutting extraneous expenses will help you not only absorb the new labor costs, but also streamline business operations.

Increase prices: If you find yourself in a market where you are competitive on prices, consider increasing what you charge. Before raising prices, be sure to communicate with your customers so they know what to expect. Also examine what your competitors charge to ensure your customers don't flee for more cost-effective alternatives. Be very careful when increasing prices, but if you have the room to do it, coupling price increases with modest budget cuts could free up some capital.

Reduce hours: If you find it difficult to offset the minimum wage increases, consider reducing your operating hours. Are you open outside of peak times? Identify when most of your revenue comes through the door versus slower times of day, and adjust your operating hours accordingly to save money.

Doesn't reducing hours reduce employee compensation?

Cutting hours to part-time would be even more effective.

[Tree Lady]

9. What I find owners are doing to make up

For higher wages is making the employees pay more for medical. CA has its own minimum wage that passed a few years ago and I have seen this happen. There should be a way to stop that or its no raise in salary.

[SoonerPride]

10. The way to stop that is universal healthcare

But that won’t happen in our lifetime.

Sadly.

[jimfields33]

11. Honestly I don't see how giving up pensions gave workers a raise

I don’t see how giving up medical benefits will help anybody but companies. Remember you still pay medical but a different bucket. I’m actually surprised companies aren’t for Medicare for all. It’d be a windfall for them.