By: John Arensmeyer, CEO of Small Business Majority and Christine Owens, Executive Director of the National Employment Law Project
Debate about raising the minimum wage is a hot topic, and the impact to small businesses is a sticking point in the argument. But what do real small businesses think about raising the wage? Small Business Majority polled a random sample of small businesses from across the country and found 57 percent of entrepreneurs support increasing the federal minimum wage to $10.10 and indexing it to the cost of living.
Some have claimed that raising the minimum wage would strain small firms because they wouldn't be able to afford to pay their workers more. However, more than half of small business owners agree increasing the minimum wage would not only help the economy, it would make low-income consumers more likely to spend money, driving up demand for goods and services at small businesses.
In fact, an analysis conducted by the Economic Policy Institute found that raising the minimum wage to $10.10 an hour would boost the economy by $22 billion during the initial phase-in period, creating 85,000 jobs.
What's more, the poll found 82 percent of small businesses already pay their workers more than the minimum wage. Small employers believe it's not right that people working full time earn just $15,080 a year at the minimum wage, which is significantly lower than in the 1960s, adjusting for inflation. And more than a third say raising the minimum wage would help make their businesses more competitive because business competitors won't be able to undercut them on labor costs.
"We pay our employees just above the minimum wage right now, and while an increase to $10.10 would force us to do some number crunching and adjust a bit, I think overall it would be good for our business and help us compete," said Kris Kleindienst, co-owner of Left Bank Books in St. Louis, MO.
As a locally-owned bookstore, our margins are pretty tight with competition from the big guys. If big businesses have to pay an increased minimum wage as well, it would be much easier for us to compete for a talented workforce. It would also put more money into the economy, and when the economy thrives, my so does my business.
Kleindienst isn't the only retail small business owner who believes in raising the wage: six in 10 small business owners in the retail/restaurant industries support increasing the minimum wage to $10.10 and indexing it to the cost of living. This support is in stark contrast to those who say retailers and restaurateurs, in particular, would go under if the minimum wage is increased.
"We start our employees off at the minimum wage, though we like to bump up their wages a little bit quickly there after," said Zach Davis, owner of Penny Ice Creamery and Assembly restaurant, in Santa Cruz, Calif.
I don't want my business to be a place that pays strictly minimum wage because I'm a firm believer that the current federal minimum wage just isn't practical. I welcome a nationwide increase that would pay all workers enough to survive off of. An increase that benefits workers will help smaller businesses that see their employees as family, remedying our concerns that our valued employees are not merely just scraping by.
Fifty-four percent of respondents also said increasing the minimum wage would help decrease pressure on taxpayer-financed government assistance that's needed to make up for low wages, as it would help people afford basic necessities that might otherwise be out of their financial reach.
While this issue has incited considerable partisan debate, it finds broad support among small business owners across a range of industries and political persuasions, showing small businesses do not view the issue through an ideological lens. The respondents were predominately Republican-with 47 percent identifying as Republican, 35 percent as Democrat and 18 percent as independent.
Consumer demand is small business owners' No. 1 concern, and they see a raise in the minimum wage as a way to stoke that demand. An increase would help entrepreneurs create jobs, which strengthens the economy even more, creating an economic domino effect. Small business owners are the nation's biggest job creators. Politicians should listen to what they're saying and act accordingly.