Small businesses are oft-times at the center of political debates -- whether they're knockdown drag-out fights, amicable conversations or something in between. One of the reasons small businesses are central to so many issues and why politicians curry their favor is because of how integral they are to our economy.
Small businesses represent 99.7 percent of all employer firms in this country. They pay nearly half of the U.S. private sector payroll and have created two out of every three net new jobs over the past couple decades.
Put simply, small businesses are our economy. Given that it's still recovering, the economy needs all the help it can get to make it over the proverbial hump and flourish. Small businesses will play a key part in that journey.
Given their importance, politicians should stand up and take notice when small business owners say they strongly support a policy that has and will continue to elicit political fights of the knockdown drag-out variety, such as increasing the minimum wage. The minimum wage is a business issue that impacts a wide swath of small firms, and according to scientific opinion polling Small Business Majority released this week, two-thirds of them support increasing it and adjusting it annually to keep up with the cost of inflation.
Some have claimed that raising the minimum wage would put small firms out of business because they won't be able to afford to pay their workers more. Our polling found a whopping 85 percent of small businesses across the country already pay their workers more than the minimum wage, though.
"You need to pay workers enough to survive. It's in your best interest as a company because if you don't there is nothing tying them to you." That's Clifton Broumand, the president of Man and Machine, a specialty computer product business in Landover, Md., who pays his workers more than the minimum wage and supports increasing it. "I want my employees to have the chance to grow and improve here. I want them to want to stay so we don't have a lot of turnover. And I pay over minimum wage because it's the right thing to do."
A minimum wage worker currently brings in just over $15,000 a year, which is significantly lower than it was in the '60s. Two-thirds of small businesses polled agree with Clifton Broumand that it's just not right.
Moral issues and the ability to attract and retain quality employees aside, there's another reason small businesses support increasing the minimum wage: consumer demand. Putting more money into workers' pockets doesn't just benefit the worker; it benefits the business community and our economy, as well. Two-thirds of small business owners agree increasing the minimum wage would make low-income consumers more likely to spend money, driving up demand for small firms' products. Another 65 percent agree increasing the minimum wage would help decrease pressure on taxpayer-financed government assistance programs that are needed to supplement low wages.
As I mentioned above, this issue has been and will continue to be a political hot potato. Given politicians' proclivity to bring small businesses into the fray, many lawmakers will likely be invoking our job creators when they discuss this issue. And given the environment in Washington, the debate will likely split along partisan lines. That's why the political breakdown of Small Business Majority's polling is so important to note. Of those polled, 46 percent identified as Republican, 35 percent as Democrat and 11 percent as independent.
This shows small businesses don't make decisions based on politics. They make decisions based on what's right for their business, what's right for their communities and what's right for our economy.
Politicians should follow their lead.