Raising the minimum wage: Where do small business owners stand?
Wednesday, June 14, 2017
Think all small business owners oppose raising the federal minimum wage of $7.25 in place since 2009? Well, think again.
According to a recent poll of more than 700 respondents conducted by BuyBizSell, 47 percent of small business owners favor raising the minimum wage, while 58 percent of prospective small business buyers support a hike.
Further, small business owners and prospective buyers are in close agreement over its effects on the ebb and flow of commerce. Roughly two-thirds of small business owners (68 percent) and potential buyers (71 percent) responded that upping the minimum wage would have little impact on whether they would buy or sell a business.
But not everyone is "buying" the benefits of a higher minimum wage.
"On the other side of the debate, small business owners and prospective buyers point to several reasons for opposing a minimum wage increase including concerns about business competitiveness and pessimism about employees' work ethic to justify the higher wages," according to Bob House, president of BizBuySell, which identifies itself as the Internet's largest and most heavily trafficked business for sale marketplace.
"Some small businesses argue that increasing the federal minimum wage would force them to significantly adjust their operations in order to deal with higher labor costs."
In 2016, Manta, an online resource for small businesses based in Columbus, Ohio, published results from 1,099 small business owners, who responded to an onsite poll, with 51 percent giving a nod to upping the federal minimum wage. However, there is disagreement over how much to increase that pay rate.
While 50 percent supported a federal minimum wage of $15 an hour, 30 percent backed hiking the minimum to $12, and 20 percent chose a $10 minimum.
Manta also broke out its minimum wage poll by industry sectors. For example, small business owners of construction firms (12 percent) and business/professional services companies (21 percent) responded with the highest backing for hiking the minimum wage.
Survey respondents from the agriculture, food and restaurant sectors less favorably backed raising the minimum (9 percent). The composition of the workforce in such sectors could shape such support.
"Any business operating in a competitive market with unskilled labor will likely be negatively affected by a higher wage requirement," according to Manta.
Manta's minimum wage poll found that 59 percent of small business owners backed raising it. The identical percentage of small business owners stated they are "more likely to vote for a state or national candidate who supports a minimum wage increase."
Potential beneficial impacts of a higher minimum wage for small business owners are twofold, according to John Swanciger, Manta CEO. One is additional consumer buying power of goods and services. Another is improved employee retention — a way for small business owners to cut hiring costs to replace departing workers.
The Fair Labor Standards Act established the federal minimum wage in 1938. Recently, more than 40 cities and counties have enacted increased minimum wages, according to the National Employment Law Project.
"Since major states like Illinois, California and New York have the green light to increase the minimum wage to $15 per hour, small business owners and buyers everywhere should begin budgeting for minimum wage requirements trending upward in the future," according to House.
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