A minimum wage increase can affect a small business, and it can be very positive on multiple fronts. The United States Department of Labor presents numerous minimum wage myth busters and offers the upsides to a minimum wage increase.
While it is likely some small businesses will be more affected than others by the minimum wage increase, many small business owners are in support of a higher starting wage and numerous small business owners are already paying above the minimum wage. The impact of a minimum wage increase is challenging to measure until is actually implemented. However, history has shown the following areas of small business can be affected by a wage increase.
Turnover can be reduced
Employee turnover is a problem for many small companies as it is very costly to hire new employees, for example, incurring training costs. A minimum wage increase can motivate employees to stay at their job for a longer period of time, and thus aid employers in retaining excellent employees. Reducing employee turnover saves time and money.
Quality employees can be attracted
A minimum wage increase can help to attract employees who have a positive attitude toward their job. Happy employees tend to value their customers, and a customer who feels valued will likely return to the place of business and become a repeat customer. Most employees who feel they are being compensated fairly will want to see their employer succeed and prosper.
Economy can be stimulated
Most people’s spending amount is dependent upon their salary amount. A minimum wage increase could help to stimulate the economy, as those who receive a salary increase may tend to spend more in their community. Increased money spent in the community can mean growth for small businesses. A minimum wage increase can be good for all who are involved with the community.
This article was written by Michelle M. Guilbeau for CBS Small Business Pulse.