In mid-February, fast-food chain workers from 15 cities around the U.S. went on strike in support of raising their minimum wage up to $15 an hour. Back in 2012, the "Fight for $15" movement was created, and low-wage workers around the country have since pushed for a federal minimum wage of $15 hourly.
We know what the workers want, but how do small business owners feel? Do they think a nationwide $15 minimum wage would be beneficial or detrimental for them? It can already be tricky for them to run their businesses successfully - what kind of changes would they need to make in the event of a federal wage increase? A survey of 339 small business owners will help us understand their perspective on things.
Do business owners support the $15 minimum wage? What do they think are some possible benefits or downsides of it?
According to small business owners, many of them supported a nationwide $15-an-hour minimum wage, with 35% strongly agreeing with it. When asked about the benefits this minimum wage might have, 68% of them believed economic stimulation to be the front-runner. An increased standard of living and higher employee morale were also very much agreed upon. In states without laws imposed to raise the minimum wage to $15, close to half of the families of workers depend on public support programs to make ends meet.
Alternatively, 63% of small business owners were worried that a $15-an-hour minimum wage might lead to increased costs and inflation. Inflation could arise because as salaries increase so do operating expenses, leading to an increase in the pricing of products and services - all of this results in an escalation to the cost of living. Over half of respondents also thought that the increased minimum wage might make starting or growing a business more difficult and may potentially raise the unemployment rate.
How will different businesses be affected? Macro and micro level aspects were considered.
Forty-four percent of small business owners believed that a wage increase would benefit big businesses, but when asked about small businesses, 61% of them thought the opposite. From a recent survey conducted of over 2,000 small business owners, 54% opposed raising the minimum wage, and one-fifth said they would need to lay off workers if it was put into place. From our survey, though, 37% thought it would have a positive effect on their personal business.
Many entrepreneurs agreed that big businesses would adjust more effortlessly to a wage increase, but were also weary of overhead increasing too much or too fast for their own businesses. Regarding entry-level workers, the economy, and the country as a whole, a large majority of respondents believed that a $15 minimum wage would have a positive impact on all three. In fact, it could literally save lives - even just a 10% increase in minimum wage could lead to 770 fewer suicides per year.
The rise in minimum wage would lead to some changes for employers, making some business decisions either easier or more difficult. Some sacrifices might also need to be made.
Just under half of respondents believed that offering raises or bonuses would be more difficult if a $15 minimum wage were to be imposed. Alternatively, 41% figured it would make retaining employees easier - if minimum wage was standardized, employees would be less inclined to seek a higher paying job. This is beneficial for businesses because it reduces turnover and subsequent training costs for new employees. In any event, 78% of employers still figured that they would need to reduce their staff in some capacity.
Also, employers thought they would most likely need to cut other expenses or increase costs for customers. If a federal minimum wage increase is put into place, small business owners need to be prepared for it. When cutting expenses, it is crucial to thoroughly examine every facet of the business - are there inefficiencies that could be addressed to save money elsewhere? Also, if prices are going to be raised, it is important to communicate this to your customers and to make sure you can still remain competitive in the market.
How do business owners treat employees? They'd like to address some misconceptions.
Employers seem to have a soft spot, as 55% of them said they would pay all of their employers more if they could, and 57% percent already pay entry-level employees more than minimum wage. The majority of respondents also agreed that an increase in wages would also translate to higher morale, loyalty, work quality, and work output. It has further been purported that workers would be more inclined to hold their positions and rely less on government "safety net" programs to get by.
Business owners are faced with many tough decisions, and they would like to quash some misconceptions about their character. Over 50% of them opposed the idea that they don't care about their employees and that they are rich and greedy. Even more of them believed the stress of running a business, the sacrifice it entails, and the struggle of staying profitable were heavily misunderstood. Since the pandemic, business owners have dealt with especially high stress levels - let's try not to be hard on them!
With the "Fight for $15" movement gaining momentum across the country, business owners have differing opinions regarding the consequences of a federally imposed minimum wage - while it may lead to economic stimulation, the threat of inflation is something to look out for too.
Small businesses, in particular, are anxiously awaiting to see where this storyline goes. In the wake of a minimum wage increase, they might be faced with tough decisions - among them, cutting expenses and staff might be necessary to manage it. Overall, however, we do see that small business owners overwhelmingly support raising the minimum wage. Now is as good a time as ever for small businesses to make sure every penny that goes in and out is accounted for. For highly organized and timely online invoicing, trust Skynova to keep you in check.
Skynova provides online software like invoices, accounting, time sheets, and more for small businesses. We also like to write in-depth articles about various topics we and our customers find interesting. They will generally have a business or workplace angle, and often an intersection with another area of society, e.g., business and technology, politics, sports, or health. The articles will be based on surveys, statistics, and research conducted by us and something we think might be conducive to finding novel insights or perspectives.
We surveyed 353 small business owners, 144 of which were employers with a payroll and 209 that employed others through freelance and contract work. Among our respondents, 143 were women, 195 were men, and one respondent was nonbinary.
In order to help gather accurate responses, all respondents were required to correctly respond to a decoyed attention-check question. Some questions and answers have been paraphrased or rephrased for clarity or brevity. These data rely on self-reporting, and potential issues with self-reported data include telescoping, selective memory, and attribution errors.
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