SBA Poll Results: Minimum Wage Increase

The Question:
If the federal minimum wage is increased, how will it affect your business?

70% - It won’t impact my business at all.

11% - The increased payroll expense could put my business in jeopardy.

5% - It will prevent me from expanding.

14% - I will start replacing employees with technology.

My Question:
The response to last week’s poll reflects a sea-change in the workplace on Main Street. Not that long ago, more small businesses would have been significantly impacted by an increase in the minimum wage. Indeed, in the 1970s, a minimum wage increase was inflationary. But today things are different: responses to our poll indicates that only 16% think a minimum wage increase will affect them negatively. Two major reasons are:

• Fewer small businesses pay their employees minimum wage.

• More small businesses accomplish growth by buying technology rather than hiring workers.

But just because the impact isn’t as negative as it once was doesn’t mean raising minimum wage is a good thing. Past experience shows that only a tiny percentage of American workers will actually benefit from this increase, but many more will be harmed because businesses now have other options. Raising minimum wage has never been about income equality. Since the 1930s, when it first went into effect, the national minimum wage has been nothing but a political device used to appeal to low wage earners to get their votes, and to unions members, whose contract wages are calculated as a percentage of the federal minimum wage.

Raising minimum wage is no longer a big negative for most small businesses, but it is for economic growth and the ability of businesses to manage their expenses based on marketplace factors, instead of by government fiat.

Any politician who proposes an increase in any minimum wage-federal, state or local-is misguided at best, and disingenuous at worst.

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