President Barack Obama used his annual State of the Union Address to talk about the importance of raising the federal minimum wage so that workers could more ably afford various necessities in their lives. However, there has been some significant pushback on the issue from lawmakers and business groups alike, despite the fact that many small business owners actually support such an increase.
A few of the best-known small business lobbying groups in the country have begun to fight back on Capitol Hill with regard to the implementation of the new minimum wage increase, which would set the amount at $10.10 per hour, according to a report from the Washington Post. The National Federation of Independent Business and National Small Business Associations both contend that such a move would require many small businesses to scale back their workforce, either in terms of hours or jobs, to ensure they can continue to operate on even thin margins.
“Raising the minimum wage will kill jobs and stifle economic output,” Ashley Fingarson, the NFIB’s manager of wrote in a letter to the U.S. Senate earlier this week, according to the newspaper.
Opposition on a lower level
While big-money lobbying groups are largely against such a change, it should be noted that polls show that individual small business owners are more divided on the issue, the report said. While some entrepreneurs certainly remain opposed to the increases because of their concerns about what the added labor costs will do to their flexibility and profitability, many polls find that the majority of owners actually support such a change. Generally, they acknowledge that if people earn more money, they spend more money, and that in turn could help to keep many struggling businesses afloat by increasing revenues. In addition, that issue seems to be backed by recent research, which has largely found that consumers who have more money tend to spend it at local businesses, rather than big-name retailers.
“That added spending, added tax base, and all the other benefits are going to far outweigh any conceivable downsides,” John Shepley, co-owner of a Maryland business that grows plants for eco-friendly roofs, said at a recent U.S. Department of Labor event, according to the newspaper.
Owners worried about the fallout from such a decision by lawmakers might want to look for ways to shore up their companies finances on their own, such as by cutting costs for small business insurance. Finding more affordable commercial insurance, for instance, could save thousands annually.