What You Need to Know About the New Minimum Wage Proposal

The proposed new minimum wage has been a widely debated topic in the news recently. Each year, debates rage in state legislatures about new minimum wage requirements. In 2013, President Obama suggested raising the federal minimum wage from $7.25 to $9. The President’s newest proposal suggests a minimum wage of $10.10, which would be increased gradually over 3 years and indexed to the cost of living. So, what are small business owners saying about this new minimum wage proposal?

According to a study published on March, 6 2014 by the Small Business Majority, “57% of small business owners support increasing the federal minimum wage of $7.25 in three stages over two and a half years to $10.10, and believe that it should be adjusted annually to keep pace with the cost of living.” The survey also found that 81% of small business owners already pay their employees more than the current minimum wage. This might suggest that there is room for discussion between lawmakers about the proposed topic.

As you can see, many people do support this hike in wages. However, others don’t. Some of the most common arguments against this proposed new minimum wage revolve around continued hiring and education. Some people believe that raising the wage will result in fewer hires as the funds available for new hire would be depleted much more quickly at $10.10/hour than at $7.25/hour. Additionally, it has also been argued that raising the minimum would serve to discourage people from pursuing higher education. This argument is crossing political lines as well, with some people in support of the hike, and in opposition to their normal party lines. They believe that raising the minimum wage will encourage more Americans to take those jobs typically held by immigrants who are willing will work for less.

For small business owners, the uncertainty surrounding the issue can be a challenge. Although these increases would be implemented over a number of years, accounting for that much of an increase would take a lot of take planning. Many small businesses believe this wage increase would allow small business to be more competitive with larger corporations that can typically undercut them on labor costs.

Entrepreneurs are seeing the long-term economic benefits that a raise in minimum wage would bring to their organization, however, others disagree – fearing for the economic well-being and viability of small businesses if this increase goes into effect. The study done by the Small Business Majority provides valuable insights into what entrepreneurs think about these suggestions, across the political spectrum.

Interested in buying a small business? Sunbelt Business brokers have listings around the world. Find businesses that fit your criteria at our Business For Sale page. Speak to a broker about your interests in a number of different industries and learn about the wage laws in that area as well.