In recent months, there has been a significant amount of discussion among consumer advocates, state lawmakers, and even in the halls of Congress about the prospect of increasing the federal minimum wage. However, the talk has some small business owners in particular worried about the impact that such a decision would have on their companies.
Today, about three out of every five small business owners say that they think an increase in the federal minimum wage would be at least somewhat harmful for their companies' bottom lines, but about the same proportion also said that if such a change were instituted, they would make no changes in terms of the number of employees they have on staff or the benefits that were extended to those workers, according to the latest Small Business Index Survey from Wells Fargo and Gallup. Specifically, these entrepreneurs were asked about a minimum wage that rose to $9.50 per hour, and 47 percent approved of such a change. Another 50 percent said they would be against such a change.
Interestingly, another recent poll from Gallup found that average Americans overwhelmingly support an increase in the minimum wage, with about three out of four saying that they'd like to see it rise from the current level of $7.25 to an even $9, the report said. This could help explain why some 30 percent of small business owners said that an increase to $9.50 would have no real effect on their companies one way or the other.
Further, it should be noted that owners were slightly less optimistic about their prospects for future success now than they were at the end of the third quarter, the report said. The current level of the SBI was a rating of plus-24, which is up considerably from around this time a year ago, but still well below the plus-25 level seen three months earlier. And while these are the two highest readings seen since the end of the recession, they remain well below the norms seen prior to and even after the start of the recession overall, when ratings tended to be between plus-80 and plus-100.
"Small business owners are still in wait-and-see mode," said Doug Case, Wells Fargo' small business segment manager. "As they plan for next year, they are looking for more economic stability. Yet the debates around the debt ceiling and Federal budget signal more uncertainty ahead. And uncertainty suppresses business growth and expansion."
Many companies still facing numerous challenges
Another reason for owners' concerns may be more internal, the report said. For instance, 11 percent said they were worried about health care costs in the most recent poll, and that was up from 8 percent a quarter earlier. Another 11 percent likewise cited concerns about the government, which marked an even more substantial increase, from just 3 percent. Owners are still also concerned about their abilities to find new business, which was named by 13 percent as being their top issue, but that was down appreciably from the 28 percent seen just three months prior. The 12 percent who said they were still nervous about the state of the economy was only a slight decline from the previous 13 percent.
Independent owners with any concerns about issues that could affect their bottom lines might want to consider the ways in which small business insurance might be affecting them. For instance, if they're paying more than is necessary for coverage including workers' compensation or general liability insurance, it might be wise to shop around for more affordable policies that can help them save thousands of dollars per year.