A new proposal to raise minimum wage by 2015 may have large businesses concerned with their ability to increase employer pay, but small business owners are reportedly more open to the change.
President Barack Obama wants to increase the national average of minimum wage from $7.25 to $9, which has caused an uproar given the rate of the economic recovery. However, a new report from BusinessWeek revealed that many groups of small business owners, including the Greater New York Chamber of Commerce, the Main Street Alliance and more, say this will add to equal pay for all employees across the country.
Some states already provide those working for minimum wage higher hourly rates than the national average. These include Washington, where the minimum wage is above $9 an hour, while Massachusetts, California, Connecticut, Illinois, Nevada, the District of Columbia, Vermont and Oregon, also have minimum wages of $8 or higher. Some states including Arkansas, Minnesota, Georgia and Wyoming, still have average well below the federal minimum, but business owners are still required to pay the federal minimum. Overall, 19 states provide wages that are above the federal minimum. There are some states that don’t have minimum wage laws, including Alabama, Louisiana, South Carolina, Tennessee and Mississippi.
BusinessWeek noted that the National Small Business Association and the National Federation of Independent Business have reported being against increases.
“If you artificially increase demand i the form of minimum wages, you’re going to suppress demand elsewhere, and that’s going to come directly from the employers side,” said Jack Mozloom, spokesman at NFIB.
Small business owners may be more willing to abide by the increased minimum wage because many already pay their employees above the federal minimum. This helps to build and maintain employee retention. As a small business owner, you have likely focused on hiring quality employees who you plan on keeping around for an extended amount of time anyway, and offering a higher pay, wages above minimum wage can make working for your company more appealing.
Ensuring your employees feel valuable to you and the company is important, and there are other ways to do this along with providing them adequate pay for the job they are completing on a regular basis. Providing them with peace of mind by having a proper small business insurance plan and ample worker’s compensation insurance is important.