Monday, July 14, 2014

New Minimum Wage argument?

  Perusing the news, I came across an article posted on Twitter about the minimum wage debate. The article was posted July 11 on ThinkProgress website (to read article, click here: Small Businesses and Minimum Wage). In this article Bryce Covert makes some remarkable statements about how a majority of small business seem to be in favor of gradually raising the minimum wage. He notes a whopping 61 percent of small business owners contacted in a national poll in favor of increasing minimum wage.

   Staggering, isn't it? Well, it is, until you continue to read the rest of the article.

   Seems that this new national poll only contacted 555 owners of for-profit companies that had 100 or fewer employees. Gee, that really doesn't seem like very many small businesses. I mean, really, I would have thought that there were a whole lot more small businesses in the United States. So I took a peek at the Small Business Administration website (link to their site: Small Business Association). According to their site, there are 23 million small businesses in America that account for 54% of all US sales. They define a small business as organized for profit, has a place of business in the US, operates primarily in the US (or has significant contribution to US economy through payment of taxes or use of American products, material or labor), is independently owned and operated and is not dominate in its field on a national basis. Number of employees that a business could have and still be qualified as a small business depends on what field your business operates in and there are charts available to peruse to see if your business falls into the "small business" category for your industry. Despite the fact that many small business categories boasted of employee numbers of 1,500 or 500, there were numerous fields that an employer would have to have 100 or fewer employees to qualify as a small business.

    To further investigate just how many small business might actually be out there in the United States, I took a look at the Statistics published by the US Census Bureau (link: US Census Bureau). As of 2008, there were millions of firms and establishments listed. Just in the category of 5-9 employees, there were 1,044,065 firms and 1,056,947 establishments in operation. There were also categories of 10-19 employees, 20-99 employees as well as data available by industry and state. Now granted, we have been in a recession and those numbers may have taken a bit of a slump over the last few years. Having sat at my desk too long, I decided to take a drive and conduct an informal count of my own. Within about three miles (and thirty minutes of driving) I had tallied up well over 300 businesses that in my estimation would qualify. I did not include any chains or franchises and I only took into account business that would boast of several employees, not including the owner/operator.

   Either formally or informally, it appears that polling 555 small business owners would not even begin to give a true statistic of how the majority of them actually feel. And who did this poll anyway? Where were the businesses located? What industries were represented? You guessed it, none of this information is included. And the earlier national polls mentioned in the article don't even give as many details about who was contacted as the first one that generated this newsworthy report.

But that is not the funny part.

    Of the business contacted in this "national poll", owners noted that there would be positive impacts from raising the wage. Like helping the economy in general. And still others felt that this raise in the wages would help them specifically benefit from lower employee turnover, increased productivity and customer satisfaction. 

   Really? You can retain employees by paying them better? And you might see increased productivity as well as improved customer satisfaction? SO WHAT IS HOLDING YOU BACK??? Last time I checked, there was no law stating that you had to pay the minimum wage and no more. With these perks, wouldn't it make sense to investigate paying a dollar or two more to get better employees and better productivity, or am I just being silly? 

   Apparently Gap and Ikea don't think I'm all that silly, as they announced that they will voluntarily increase their lowest wages with these goals in mind. 


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