Cities and states around the country are considering raising their minimum wage levels, and one of the biggest sticking points in this debate has been the impact of a higher minimum wage on small businesses. Opponents of a higher wage argue that raising the minimum wage would harm small businesses. The reality, though, is that the majority of small businesses actually support a higher minimum wage. In fact, Small Business Majority just polled a random sample of small business owners around the country and found broad support for raising the minimum wage to $12 per hour.
The scientific opinion poll found 60 percent of small businesses nationwide support gradually raising the federal minimum wage to $12 per hour by 2020 and adjusting it annually to keep pace with the cost of living. Of poll respondents that would be directly impacted by a wage increase – that is, businesses that pay at least some of their employees $12 per hour and under – 58 percent support raising the minimum wage to $12 per hour. What’s more, 56 percent of small businesses in the retail and restaurant industries combined support raising the minimum wage.
The fact that small businesses support a higher minimum wage shouldn’t come as a surprise to those who understand small business owners’ No. 1 concern: consumer demand. A higher minimum wage helps boost consumer demand by putting more money in the hands of workers that they can in turn spend at local small businesses. In fact, recent research found increasing the minimum wage to $12 would boost wages for more than 35 million low-wage workers – workers who will in turn spend those earnings at local small businesses. This boost in demand for goods and services will help stimulate the economy and help create opportunities for small employers to grow. Toby Burke Hemingway, owner of Hemingway and Pickett, a home decor store in Los Angeles, is one such business owner who believes raising the minimum wage can have an important economic impact.
“Wages have been stagnant (and in real terms, falling) long enough, to the ultimate benefit of very few in our society,” said Hemingway. “It is time to make fair and reasonable differences to working peoples’ lives and boost our economy from the ground up. A $12 per hour minimum wage, by 2020, feels like a very modest and positive start to me.”
What’s more, small business owners believe that a higher wage helps boost employee morale, which is good for employee productivity and retention and their business’ bottom line. Additionally, many small business owners would like to pay their employees above the minimum wage but can’t afford to because their competitors pay lower wages.