Small business owners are bottom-line oriented. They make decisions based on what makes financial sense.
More times than not, however, doing right by their employees is just as important as the almighty dollar in the decision-making process.
Small employers know a positive work environment means increased productivity, which in turn improves their bottom line. This explains why Small Business Majority’s most recent scientific opinion poll found 57 percent of small businesses support increasing the federal minimum wage to $10.10 an hour.
Small business owners know that raising the minimum wage will not only provide some extra cushion for their employees, but for their customers, too. A higher minimum wage is good for consumer demand, which can give a much-needed boost to the economy and small business profit margins.
Some have claimed that raising the minimum wage to $10.10, which is being proposed in Congress, 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.
Raising the minimum wage also finds broad support in the retail and restaurant industries with six in 10 small business owners supporting an increase to $10.10. This support is in stark contrast to those who say retailers and restaurateurs, in particular, would go under if the minimum wage were increased.
One such retailer is Richard Skorman, owner of the Poor Richard’s complex of businesses in downtown Colorado Springs. He and his wife and business partner Patricia Seator start their employees above the minimum wage and offer health benefits after six months, in addition to other benefits, because they believe it’s the best thing for their employees and their business.
“We strongly believe that paying a living wage with benefits greatly helps our business because we retain our employees, and the longer they stay, the better they become at their jobs,” said Skorman. “We’ve realized there is a big cost to constantly training new employees. Most employees making $8 an hour don’t seem happy with their jobs and will quickly leave for more pay. By paying our employees more, we retain quality employees, which is ultimately good for our bottom line.”
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. And right here in the Centennial State, 269,000 people would be directly impacted by increasing the federal minimum wage to $10.10, resulting in a total wage increase of $578 million for the state.
Small Business Majority’s poll found that, like Skorman and Seator, 82 percent of small business owners already pay their workers more than the minimum wage. They believe it’s not right that people working full time earn just $15,080 a year at the minimum wage.
“We have many regular customers, and the fact that they see we have happy and hard-working employees has been important to our success,” said Skorman.
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. In fact, another analysis found that almost 24,000 Coloradans would no longer need assistance through the federal food stamp program, which would result in $40.7 million annual savings in the program in Colorado.
Small business owners believe raising the minimum wage and helping to lift hard-working Americans out of poverty is the right thing to do. And in this case, doing the right thing makes good business sense, too. Small business owners are the nation’s biggest job creators, and here in Colorado, small firms make up a vast 99 percent of the state’s employers.
Politicians should listen to what they’re saying and act accordingly.
Tim Gaudette is the Colorado outreach manager for Small Business Majority.