• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Facebook
  • Instagram
  • LinkedIn
  • Twitter
  • YouTube
Big Ideas for Small Business logo

Barbara Weltman

Big Ideas for Small Business, Inc.

Whitepaper download

Subscribe and download our eBook, "150+ Tax Deductions for Small Business A to Z."

This field is hidden when viewing the form
Get the:

  • Home
  • About Us
  • Big Ideas For Your Business
    • Idea Of The Day ®
    • SMB Legal
    • SMB Taxes
    • SMB Financial
    • Small Business
    • Newsletter Archive
  • Services
  • Books
  • Blog
  • Multimedia
    • Videos
    • Radio Shows/Podcasts
  • Be a Guest Blogger

Minimum Wage Increases Are Good: Fact or Fiction?

June 28, 2016 / By Barbara Weltman

© Onblast | Dreamstime.com - <a href="https://www.dreamstime.com/stock-illustration-payroll-salary-payment-money-wages-concept-vector-illustration-image72312880#res2965056">Payroll Salary Payment Photo</a>There’s no easy answer to this question. In the course of Senator Sander’s presidential bid, the call for a $15 minimum wage rate was loud and clear. Some localities have already adopted this rate; others are considering it.

What are the real economic results of a substantial hike in the minimum wage rate?

Why it’s a good thing

There are certainly some compelling arguments on why a $15 minimum wage is a good thing. A couple of years ago, economist Robert Reich listed 7 reasons:

  1. It is keeping up with inflation
  2. The current rate isn’t enough to keep workers out of poverty
  3. Even with the rate hike, minimum wage workers still require subsidies (e.g., food stamps)
  4. The increase won’t result in job losses
  5. The increase won’t result in price hikes
  6. Democrats should aim for a high rate because Republicans will argue for something lower
  7. It’s the morally right thing to do

In 2014, Seattle increased its minimum wage to $15 per hour, phased in for employers with fewer than 500 employees over 7 years. The Evans School for Public Policy & Governance found that there was “little or no evidence” of price increases in Seattle following the initial increase.

Why it’s a bad thing

While workers who receive a higher pay rate as a result of a higher minimum wage will benefit, there is some evidence to suggest that some workers won’t. Some workers will lose their jobs while others will have lower take home pay because of reduced hours. That was, in fact, the finding from the Employment Policies Institute. In a survey of employers in the District of Columbia, which saw a minimum wage hike from $8.25 per hour to $11.50 per hour in 2014, and has a proposal for another increase to $15 per hour, nearly half had already laid off workers or cut hours in response to the increase. More than half planned to raise prices to offset their higher payroll costs. In other words, this survey found that Reich’s points #4 and #5 weren’t true. One more point in the survey: If a $15 rate were implemented in D.C., 20% of businesses would relocate (e.g., Virginia uses the federal minimum rate, which is currently $7.25 per hour, which is half of the $15 rate).

Some employers in Oregon are grumbling at their higher minimum wage rate law enacted in March. Under the new law, rates are set to rise by 2022 to $12.50 in rural Oregon, $13.50 in mid-sized regions, and $14.75 in the Portland area. Unions want the rate to go to $15 per hour statewide, but not everyone is happy. One orchard owner said he would suffer; he couldn’t just raise prices to offset the payroll hike because consumers won’t pay for Oregon fruit when fruit from other states or other countries are cheaper.

Conclusion

Small business owners are just about split on the question of whether it would be good to raise the minimum wage to $15 per hour, according to a Manta survey  last April. While 49% oppose the increase, 51% are in favor of it.

The truth about whether raising the minimum wage is good probably lies somewhere in the middle: there are some compelling reasons to do the raise, but it’s important to anticipate the consequences. Gradual increases likely will help markets adjust without causing disruptions to workers, employers, and consumers.

Tags $15 minimum wage minimum wage pay rate small business wage increase

Primary Sidebar

Categories

  • General Business (498)
  • Guest Blog (109)
  • Homepage (21)
  • Small Business (990)
  • SMB Financial (322)
  • SMB Legal (66)
  • SMB Taxes (324)

Barbara’s Recent Posts

  • Scale Your Business by Stepping Up IP Protection May 29, 2025
  • Disasters Happen: It’s Important to Be Prepared Now May 27, 2025
  • How Work Order Software Transforms Small Business Operations May 26, 2025
  • The Numbers Are Up for Sole Proprietorships May 22, 2025
  • New Business or Project Crowdfunding: What To Know May 20, 2025
  • Old-School Estimating vs. Smart Solutions: What’s Really Holding You Back? May 19, 2025
  • Employees Getting Called to Public Service: What to Know May 15, 2025
  • Not Too Late to Prep for Summer Now May 13, 2025
  • How Will the Next Generation of Learners Affect the Workplace May 12, 2025
  • Moms Know Best: Lessons for Entrepreneurs May 8, 2025
  • Mental Health Challenges in the Workplace May 6, 2025
  • Let’s Celebrate Small Business! May 1, 2025
Awarded Top 100 Small Business Blog medal (link will open in a new window or tab)
Marquis Who's Who 2023 Badge
Top Small Business Blogs (Link will open in a new window or tab.)
8 Financial blogs small business Owners Need to Read. Invoice home.  (link will open in a new window or tab)
Best Small Business Blog, Expertido.org
Top 50 Small Business Blogs 2018
Best Small Business Blogs
BizHumm Top 100 Business Blog Award to Barbara Weltman
FitsSmallBusiness.com: Award for Best Small Business Blog 2017 (link will open in a new window or tab)
FitsSmallBusiness.com: Award for Best Small Business Blog 2016 (link will open in a new window or tab)

Footer

Big Ideas for Small Business logo

Small business ideas, business tax news and small business consulting from Barbara Weltman to provide business owners with the information they need to succeed. Visit our small business blog, Idea of The Day®, small business books and articles on small business taxes, small business finance and small business legal advice.

Contact Us

[email protected]

(772) 492-9593

gacor maxwin situs slot thailand terpercaya situs slot gacor situs gacor akun pro thailand slot bandar togel terpercaya

Latest Tweets

bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

Starbucks Rediscovers Its Human Side - Branding Strategy Insider https://bit.ly/3H9KwHP #smallbusiness #branding #marketing

Reply on Twitter 1928884285445931367 Retweet on Twitter 1928884285445931367 Like on Twitter 1928884285445931367 2 Twitter 1928884285445931367
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

New Business or Project Crowdfunding: What To Know - https://bit.ly/43nclnL #startups #loans #crowdfunding #smallbusiness

Reply on Twitter 1928862798886441182 Retweet on Twitter 1928862798886441182 Like on Twitter 1928862798886441182 1 Twitter 1928862798886441182
bigideas4sb Big Ideas for Small Business® @bigideas4sb ·
May 31

10 Simple Ways to Get Employees to Quit — Improve Your HR https://bit.ly/44KRu01 #smallbusiness #workplace #hiring #employees

Reply on Twitter 1928844506998136977 Retweet on Twitter 1928844506998136977 1 Like on Twitter 1928844506998136977 1 Twitter 1928844506998136977
Load More

Copyright © 2008–2025 Big Ideas for Small Business, Inc  |  Designed by Hudson Fusion

  • Privacy Policy
  • Sitemap