Guest Column: Minimum Wage
If Congress actually listened to small business owners, the minimum wage would be going up. Instead, July 24 will mark five years without an increase since the federal minimum wage was set at $7.25 an hour in 2009.
Small business livelihoods depend on revenue, not rhetoric. Small business owners know there's a problem when median household income is lower than it was in 2009, adjusted for inflation, but the Dow Jones stock index has soared to record highs - nearly doubling since July 24, 2009.
Businesses rely on consumer spending and consumer spending depends heavily on wages. The minimum wage sets the floor under worker paychecks. At $7.25 an hour, the federal minimum wage comes to just $15,080 a year for full-time work.
That's so low that today's minimum wage workers make less than their counterparts did 64 years ago, accounting for the rising cost of living. Adjusted for inflation to 2014 dollars, the minimum wage was worth $7.40 an hour way back in 1950.
That's so long ago, it was five years before Ray Kroc founded the McDonald's Corporation, seven years before "Leave it to Beaver" began on television and nine years before the first Barbie Doll.
Businesses need customers who can afford what they are selling. When a growing number of workers can't make ends meet, it weakens consumer demand and hurts business.
Small business owners strongly support increasing the federal minimum wage to $10.10, according to a new national poll of small businesses with employees. A striking 61 percent of small business employers favor gradually increasing the federal minimum wage to $10.10 over two and a half years, and then adjusting it annually to keep pace with the cost of living.
Small business support for raising the federal minimum wage is strong across the country. Employers favor raising the minimum wage to $10.10 with a 67 percent majority in the Northeast, 61 percent in the Midwest, 60 percent in the West and 58 percent in the South.
Small business owners expect a higher minimum wage to increase consumer purchasing power and help the economy. They also expect it to reduce employee turnover and boost productivity and customer satisfaction.
The scientific nationally representative opinion poll of small business employers was conducted by Lake Research Partners and released by the American Sustainable Business Council and Business for a Fair Minimum Wage. More of the small business respondents identified themselves as Republican than either Democrat or Independent.
Eric Henry, President of TS Designs, an apparel business in Burlington, North Carolina, said in commenting on the poll findings, "From over 30 years in business, I know firsthand that investing in employees is the best investment a business can make. We need our government to raise the minimum wage so that all workers can make a living and businesses have the stronger customer base we need to create lasting homegrown jobs and profitability. And by automatically adjusting the minimum wage for the cost of living in future years, we will assure it doesn't again erode and undermine our economy."
At its inflation-adjusted high point in 1968, the minimum wage was worth $10.94 in today's dollars. Those were the days when you could work your way through college and not come out with tens of thousands of dollars in debt. American families were upwardly mobile, not downwardly mobile.
We cannot build a strong economy on a falling wage floor.
Low-income workers spend their dollars on Main Street, not Wall Street. A higher minimum wage will increase sales at local businesses and reduce the strain on our social safety net and our communities caused by inadequate wages.
"Workers who make a part-time wage while working full time, are not able to support their families or be a good customer base for local businesses in their neighborhoods, towns or cities," said Robert Olson, owner of Olson & Associates in Springfield, Illinois. "Raising the minimum wage is a common sense first-step solution to building a healthy local economy."
Most small business owners, like most Americans, support a minimum wage increase. Five years without a raise is already too long.
Holly Sklar is the CEO of Business for a Fair Minimum Wage