There has been talk for some time now in the halls of Congress about the possibility of raising the federal minimum wage, but that change might leave small business owners nervous about the impact that such a decision would have on their bottom lines.
Today, three out of five small business owners nationwide say that they're concerned that an increase in the minimum wage – to $9.50 an hour – would hurt their companies, according to new data from Wells Fargo Business Insights. However, about the same number also said that they have no plans to reduce their workforce, or the benefits they provide their employees, if this increase took place. Interestingly, though, similar changes have already occurred at the state level in California, New Jersey and other parts of the country.
"Small business owners are still in wait-and-see mode," said Doug Case, manager of Wells Fargo's small business segment. "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."
Only 47 percent of small business owners polled said that they supported an increase in the minimum wage to that $9.50 an hour figure, compared with 50 percent who disapproved of such a move, the report said. That stands in stark contrast with feelings among average Americans, of whom about 75 percent say they'd be in favor of such a change.
Despite the threat of employee costs rising, though, the poll also found that owners remain pretty optimistic about their chances for success in the near future, the report said. The Wells Fargo/Gallup Small Business Index was largely unchanged, but is still well into positive territory at plus-24. This marked the second-highest score seen in the last five years, but still remains below the norms seen prior to the onset of the recent recession, likely indicating that the economy still has a ways to go before owners are truly more confident.
Owners worried about the impact that such a decision could have on their margins might want to reduce expenses in other ways, such as by shopping around for more affordable small business insurance. Cutting costs for coverage – including workers' compensation or general liability insurance, for instance – might help companies save thousands of dollars or more per year.