Minimum Wage

Contrary to Perception, Small Businesses Do Back a Minimum-Wage Increase

An activist from the small business community makes the case for today's ballot initiatives in Arizona, Colorado, Maine and Washington State.
Contrary to Perception, Small Businesses Do Back a Minimum-Wage Increase
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Today, voters in four states will decide on minimum-wage initiatives calling for an increase, by 2020, to either $12 (Arizona, Colorado and Maine) or $13.50 (Washington State).

And, contrary to popular perception, plenty of small-business leaders -- of household names like Ben & Jerry's and Wetzel's Pretzels, to Main Street mom-and-pops -- are backing those increases. They're saying that higher wages will be good for businesses, customers and the economy. 

As CNN wrote last week, "The pendulum seems to be swinging in favor of higher wages nationally, where 29 states and Washington, D.C., now have minimum wages above the federal level of $7.25 an hour."  

The CNN report in fact characterized these states as a counterpoint to the "stagnant" federal minimum wage that the Obama administration has been countering with the big changes it's put into place for overtime regulations: On December 1, salaried federal workers earning $23,660 to $47,476 a year will be eligible for overtime pay.

Both presidential contenders, moreover, want an increase in pay for Americans of modest means: Donald Trump supports $10 an hour, and Hillary Clinton, $12 or $15, depending on the economic feasibility of a hike in the city or municipality affected.

Along with these political moves, our own organization, Business for a Fair Minimum Wage, has been active on the minimum wage front from a business perspective. We're a national network of business owners, executives and business organizations that believe a fair minimum wage makes good business sense.

In this regard, we asked small business owners to weigh in. Here's some of what we heard back.

Gary Johnson, president and CEO of AFI Contractors in Toledo, Ohio: “When the minimum wage is set too low, it’s bad for workers and their families who are under constant financial stress, it’s bad for customers; and it’s bad for businesses and our economy, which is fueled by consumer spending,” said Johnson. “By raising the minimum wage, we wouldn’t just lift the floor under workers, we would lift the floor under our economy.”

Bill Phelps, co-founder and CEO of Wetzel’s Pretzels, a national chain based in California: “We’ve experienced strong sales growth after minimum wage increases," Phelps said. "The increased cash circulating in the economy goes a long way in offsetting the higher hourly minimum. And businesses see other offsets as well, such as reduced employee turnover and increased productivity. Raising the minimum wage is good for our bottom line.”

Edwin Zoe, owner of Zoe Ma Ma restaurants in Boulder and Denver: “I’ve been a fiscally conservative Republican since I was a young man, and that’s why as a business owner, I support Amendment 70 to raise Colorado’s minimum wage to $12 by 2020,” Zoe said.  “Amendment 70 will reward work, encourage self-reliance and strengthen the free market by expecting businesses to compete fairly and not count on taxpayers to subsidize them through public assistance for employees who are paid too little to live on. Raising the minimum wage is good business and good government.”

Margo Walsh, owner of MaineWorks LLC in Portland, Maine (and Maine’s 2016 Small Business Person of the Year): “The current minimum wage is keeping workers stuck and struggling in poverty,” Walsh said. “Raising the minimum wage to at least $12 is vital to making a living even possible. When employees are compensated fairly for their work, they’re more productive; and our businesses, our customer base, our tax base and our communities are healthier.”

Michael Lastoria, co-founder and CEO of &pizza (which has a growing number of locations across Virginia, Pennsylvania, Maryland and Washington, D.C.): “&pizza is a company that has been, and will continue to be, built on the shoulders of our tribe -- our employees," Lastoria said. "Fair pay is a vital ingredient in our company’s success and culture and the well-being of our more-than-400 employees. That is why we chose to provide a starting wage that is significantly above the minimum. It’s a simple, but critical concept: Take care of your people and they will take care of your customers.”

Rick Altig, chairman of Altig-Orlovic American Income Life (with offices throughout Washington State): “Our investment in employees, including good wages and healthcare, is key to their investment in our success as a business,” Altig said. “Raising the minimum wage is a vital step in ensuring that Washington workers -- who are also our customers -- make a living wage. That’s good for workers, businesses and the entire community.”

The business case

Since our organization's founding in 2006, we've made the business case for the 2007 federal minimum wage increase that ended the longest period in history without a raise. The last step in that increase was the July 2009 increase to $7.25. Now, there is growing public awareness that raising the minimum wage yet again will help businesses and the economy.

Unfortunately, Congress has not raised the federal minimum wage since 2009, despite strong public support. Meanwhile, more than 1,000 businesses and business organizations have signed the Business for a Fair Minimum Wage statement supporting a federal minimum wage of at least $12 by 2020. A growing number of cities and states -- including those on today's ballot -- have taken action through legislation and ballot initiatives.

Minimum-wage ballot wins today will increase the momentum building across the country to raise the minimum wage in more states, and nationally. We look forward to action in Congress to raise the federal minimum wage so all Americans can benefit from a decent wage floor wherever they live or do business.