Fair wages help small business
Want to keep good employees? Pay them a fair wage
As a small-business owner, I find that people expect me to grumble about the increase in the federal minimum wage to $7.25 an hour as of July 24. But I’m not grumbling. In fact, I think it should be raised further.
Every time the minimum wage goes up, I find that new customers come to my bicycle shop because they have more money to spend, and some of my old customers buy more when they visit. With the economy in the slump it’s in today, this kind of boost in consumer spending not only helps individual entrepreneurs, but also helps the country as a whole to recover.
I understand the critics’ point of view that a higher minimum wage puts a strain on small businesses’ ability to meet payroll. But I’m a living counterexample, proving that the additional revenue from customers with more to spend often outweighs the extra expense.
Small businesses have so many problems—competition from untaxed Internet sales, unaffordable health coverage, the weak economy—that 70 cents more an hour is the least of our worries.
Living wages make good business sense. Even though I could have gotten away with paying my entry-level workers the minimum wage of $6.55 this past year, I chose to offer $8 an hour or more instead. I find that paying better wages gives me more applicants to choose from, and I can expect more from them. Well-paid employees stay on the job longer, which saves me training costs as well. Like Henry Ford, who paid a generous $5 a day so that Ford workers could buy a Model T, I want to enable my employees to buy my wares.
In addition, if my competitors are required to pay a living wage as well, that keeps me from being undercut by businesses that cut corners.
With the minimum wage so low, many employed people qualify for food stamps, fuel assistance and other government programs. We can either pay for welfare programs with our taxes, or we can require that everyone gets enough in their paycheck. I think giving them a living wage has more dignity. I would be ashamed if an employee of mine had to turn to public assistance or else go without health care, heat or food.
Economic stimulus doesn’t only mean building roads and bridges, hiring more teachers, and bailing out banks and auto companies. It means putting money into the hands of people who will spend it immediately at small businesses like mine, which will in turn spend more on supplies and hire more workers, thus reviving the economy.
I’ve always believed that a rising tide lifts all boats. The more money that’s in circulation, the better off everyone will be.