The minimum wage is a hot button issue right now, with many workers demanding higher wages to help offset the much higher cost of goods and services needed to pay the bills, and be able to afford food, shelter and transportation. The minimum wage has not risen consistently with the cost of living in America, and especially in some more expensive cities, it is not enough to have one minimum-wage job to pay for all your living expenses.
While most businesses do not employ minimum wage workers as the majority of their workforce, all small business owners have an opinion on the minimum wage and how it should or should not be changed over the coming years. Many believe that it should be raised because it will give workers more purchasing power to go out and buy more goods and services than they could before, which will stimulate businesses, especially in economies that may be struggling.
Others who believe it should not be raised argue that the costs required to increase the minimum wage would force businesses to have fewer workers, reduce their product offerings or services to cut costs in other ways, or potentially even close because they could not afford the extra line in the budget. Human capital is one of the most expensive things for a business, and for businesses such as fast food restaurants that operate on smaller margins, raising the minimum wage by too much could eliminate those profit margins altogether if the business did not make any other changes.
Many industries have seen an increase in minimum wage due to competition rather than legislative pressure. If your direct competitors increase their starting wages for employees, you may be in danger of losing your best employees to the competition. Make sure to take into consideration your own staffing needs before deciding what the starting salary at your business should be.
This article was written by Gillian Kruse of Examiner.com for CBS Small Business Pulse.