In a perfect world, entrepreneurs would be able to pay good
wages, provide paid medical benefits to all employees and their
dependents, and ensure that no worker ever has to choose between
coming to work and caring for young children or elderly parents.
Health care would be affordable, and minimum-wage laws would be
unnecessary.
But even with this country's near-perfect economy, the world
certainly isn't perfect. One of the curses of an imperfect
world is that what you see is not necessarily what you get, and
what you want is not necessarily what's best for you. This is
especially true when it comes to small-business politics.
Take wages and health care. In the past, entrepreneurs could
reflexively say mandates in these areas would negatively affect
them. But now, given the United States' prosperity and tight
labor market, everything has changed. It's an employee's
market, which makes it more difficult to just say no to proposals
for an increase in the minimum wage or requiring employers to
provide health care for uninsured workers.
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This long-raging debate over the minimum wage shows why
knee-jerk reactions no longer apply. If the proposed Fair Minimum
Wage Act is passed, minimum wages will increase by $1-- to
$6.15--by September 2000. Predictably, small-business advocates
like the National Federation of Independent Businesses (NFIB)
oppose the proposal, citing now-standard refrains: Job creation
will be stifled, some entrepreneurs could be forced out of
business, there will be a trickledown long-term inflationary
impact, etc., etc., etc.
But do these assumptions bear out? A recent survey by the Jerome
Levy Economic Institute of 500 small companies found only 13
percent would be negatively impacted if the minimum wage were
increased to $6 an hour, down from 21 percent in 1998.
Also, the NFIB says mandating health coverage increases
insurance costs and makes employers unable to carry coverage. But
proponents say an overwhelming need demands more responsible
action: Statistics from the Employee Benefit Research Institute for
1997 (the most recent figures available) indicate almost 25 million
workers ages 18 to 64 didn't have health insurance.
Changing public opinion is another reason to rethink hot-button
issues. In our healthy economy, when small-business owners protest
an increase in minimum wages or mandated bare-bones health care,
much of the public fails to sympathize. Instead, they call
entrepreneurs whiners--money-makers unwilling to share their
prosperity with employees in the form of better wages and
benefits.
However, this turning tide of public opinion has created
somewhat of a knee-jerk reaction of its own. These are by no means
black-and-white issues, no matter what your perspective. Many
entrepreneurs do face the tough issues, they do make the right
choices, and they do end up paying.
Sharon Miller knows that scenario well. Miller's
Midland, Michigan, firm, Immediate Temporary Help Inc., employs 250
people, and pays $7 to $15 per hour, depending on experience. Her
philosophy: You have to pay more to secure better workers and
provide higher-quality services to customers. The cost of that
philosophy: short-term losses. Recently, Miller lost a $260,000
contract to a competitor who was able to bid lower because it paid
its employees less than Miller did.
"It knocks you right to your knees," she says. Still,
her convictions remain unchanged. "How can I stand for
excellence yet treat my employees like they're entry-level at
best?"
Miller's situation paints a more accurate picture of
entrepreneurship than does the stereotype of the greedy business
owner. Running a business today involves cutthroat competition for
both clients and employees. To survive, entrepreneurs must stop
believing wholeheartedly in the mantras of certain advocates, and
start thinking for themselves. What makes sense ethically, not just
politically? What do your employees truly de-serve? What's
better for your business in the long run, not the short term? When
you can answer these questions, you'll have the tools necessary
to succeed in this far-from-perfect world.
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