I don't know if I can support rasing the mininum wage if small businesses are not protected

I don't really need to explain myself more. I am beginning to think that rasing the minimum wage is bad if the small businesses tend to fail because of it, with all the outsourceing of factory jobs to overseas countries it's looking like that the small businesses are becoming the backbone of america you know your teddy bear shops, dollar stores etc. And I don't want to see the businesses go out of business because they can't afford to pay $7.00/hr to there employees. So really my question to you is what are the Democrats tend to do to protect businesses from going out of business cause of the wage hike.

in nearly 10 years. I think they will be able to afford the increase. I don't believe that many businesses will be adversely affected by this.

It won't affect most of them.

if the small businesses have not raised their prices in 10 years, the it would be understandable. However, if the prices of their products went up but their labor costs did not, then I think perhaps they should shoulder the burden..

despite wage stegnation labor costs are going WAY up. Even those who do not provide any insurance coverage - that hire everyone at min wage, have seen big increases in other labor costs - mostly in the form of state and federal taxes the business pays per employee - Such as unemployment insurance, worker's comp insurance, social security.......

I know health insurance costs have gone up for those employers that provide it.

with 10 years of potential increase in prices, I'd say any business is long overdue to pay their workers a higher minimum wage. Any business that can't do that shouldn't be in business.


http://www.cafepress.com/liberalissues/479862

it has never been demonstrated that a rise in the minimum wage causes businesses, large or small, to fail. The forces opposed to such a rise always yell and scream that the sky is falling, but it never does.

Lots of things cause small businesses to fail: lack of access to credit, soaring health care costs, insurance redlining (first in inner-city areas, now along the entire Gulf Coast). Let's address these issues rather than trying to balance businesses' books on the back of low-wage workers.

I have two good friends who own their own business as well as a family member. One is going to withstand the required pay raise, one may not and the third is probably going to have to close. Without the minimum pay raise, all three would have stayed in business.

I sincerely am having a hard time understanding the circumstances that would cause this.

Regarding the one who will probably have to close: What circumstance exists that would make this company less competitive even though it's competitors will face the exact same wage increase?
How is this wage increase different than an increase in fuel costs, or raw material costs, or vehicle maintenance costs?
Why would your friend be more vulnerable than another company?

I'm always interested in case studies (and even more interested to discover what businesses are able to hire and retain employees at $5.25/hr).

the business that hire only the disabled (Goodwill for example) may have to close their business. I'd provide a link but I heard this on the news. (For AZ folks it was channel 12) Our governor said the laws cannot be changed to exampt them as it was shat the people voted for in the last election.

Like the previous poster said, there may not be a lot of small business who will fail because they couldn't afford their employees - if they could afford $5 something 10 years ago, then $7 now shouldn't be a death sentence, given that prices have risen (though this proposed increase is greater than the rate of inflation over that time)

I think the bigger issue is that some companies may not be able to grow AS FAST, and therefore may have to cut an employee or two.

So that's the big problem to me, it will help most of the minimum wage people by increasing their income, but it will also cost some of them their jobs.

small businesses were no more likely to fail after previous minimum wage increases than at any other time. No business failure has ever been attributed to the few cents more per hour that employees get paid.

There is one effect people don't talk much about. If you raise the minimum wage of the lowest paid employee, then the next-lowest paid guy wants a raise too. Let's say you have two workers. One makes $5.00 per hour and one makes $7.00 per hour. If - by operation of law - you now have to pay the first guy $7.00 per hour, then suddenly he's making the same as the other guy who used to be making $2.00 more per hour. He won't think it's fair suddenly to be making the same as the lowest guy, so he will immediately want a raise too. So the owner will likely have to give him a raise too. A little hidden cost in there no one mentions.

But what do I know -- I don't pay any of my people the minimum wage. It's just too little to even be competitive in today's market.

More people with more money to spend improves the entire economy. You might not get more business directly, but the supermarkets will, and the toy stores, and the contractors, and the airlines, etc. And they then have more money to spread around to their vendors. And so on in ripples outward.

I think increasing the minimum wage probably helps a whole lot of businesses far more than it harms any.

employees. They do everything themselves. If a business can't afford even one employee at $7.00/hr they already have a failing business.

Those were my thoughts and I am a small business owner with 25 employees.

Right now the never ending increases in health insurance costs is the biggest problem. That eats up about 2 positions in my co.

<snip>
Despite the fact that contemporary economic research casts a long shadow of doubt on the contention that moderate minimum wage increases cause job losses, opponents still lead with this argument. This so-called “disemployment” argument is particularly difficult to maintain given two relatively recent developments in the history of minimum wages. First, the quality of empirical minimum wage research rose steeply over the last decade, due largely to economists’ ability to conduct pseudo-experiments3. Such experiments, rare in empirical economics, typically utilize the fact that numerous states (12 as of today) have raised their minimum wage above that of the federal level. This variation between states gives researchers a chance to isolate the impact of the wage change and test its impact on employment and other relevant outcomes. As stressed in the Card and Krueger book cited above, these studies reveal employment elasticities that hover about zero, i.e., they solidly reject the conventional hypothesis that any increase in the minimum wage leads to job losses among affected workers.

Second, following the most recent increase legislated in 1996, the low-wage labor market performed better than it had in decades. The fact that the employment and earnings opportunities of low-wage workers grew so quickly following that increase continues to pose a daunting challenge to those who still maintain that minimum wage increases hurt their intended beneficiaries.

Recently, the Fiscal Policy Institute (FPI) released a study of the impact of higher minimum wages on small businesses4. Their analysis focuses on various outcomes for businesses with less than 50 employees, comparing these outcomes between states with minimum wages above the Federal level and those at the Federal level. If the theory that higher minimum wages hurt small businesses is correct, then we would expect there to be less growth in such enterprises in states with higher minimum wages. In fact, as shown in Figure 5, the opposite is the case.
<end snip>

http://www.epinet.org/content.cfm/webfeatures_viewpoints_raising_minimum_wage_2004

And we couldn't hire someone at minimum wage; they need more. My wife's business was in a position to hire two employees. The minimum they could pay them was $10/hour. Anything less and people were not interested.

Small business is not any different from large business in that the cost of hiring an employee always has to be offset by the profit that said employee will generate. You don't hire if it doesn't profit you, regardless of what the minimum wage is.

If you look at the history of wage increases you'll notice that businesses do better, not worse, when the wage is raised.

and every time it's proven unfounded. In Oregon, we already have a minimum wage increased beyond the current proposal and indexed to inflation. Retailers and fast food outlets (along the with chamber of commerce) all predicted ruin.

Which of course, didn't happen -partially due to something called the multiplier effect. When people at lower socioeconomic levels have more disposable income, they tend to spread that income around- which in turn actually increases the value of the dollars circulating in the community- often to other local businesses.

Don't buy into the simplistic far right claptrap. Like the so called "flat tax" it doesn't stand up to scrutiny.

AKA Demand Side Economics ....

Hope all is well JJ ....

To compare a minimum wage rise with the price of products coming from the far east is ludicrous, to say the least. Many of these countries use child enslavement and pay their victims pennies a day. China is even using prison labor. How do small, medium or even large businesses compete with that?

The only solution to this is to legislate and enforce Fair Trade Agreements. Unless a country is willing to pay decent wages and protect their environment, we should tax their products, heavily. Anything else is just working toward turning this country into a massive slum filled with "minimum wage" workers saving to buy a loaf of bread.

I hope they do!- while we still have some businesses left in the U.S. - other than services and fast food places (burger King and McDonalds).

China is keeping their currency artifically lower (about 25% some say) rather than letting it float which it would do in real free trade environment. This would increasse the prices of their exports to us and make our products more competitive. A new equilibrium would be reached and a stabilization would occur.

Your response deserves a thread of it's own.

because they actually care about their employees and know that nobody can live on $7 an hour.

I am disabled and have assistants and pay them a fair wage, more than twice the new proposed minimum wage, in fact. It is expensive, but in return I get a better employee who feels respected for their hard work.

Another advantage of raising the minimum wage is that businesses of any size will treat their employees better, because it becomes cheaper to hire a quality person and treat them well than to hire any moron off the street and treat them as disposable. This also means better service for business patrons, so everybody wins.

destroy the small businesses in America and yet the President just hailed the small businesses for creating the most new jobs. Hos can they do this when those previous wage increases drove them out of business.

By the way, don't forget to go shopping!

Small business will flourish! Let the market squeeze the shit right out of the working class. Hell yes, 20 people working for $3.00 an hour is better than 6 people working for $10.00 an hour.

No. No no no!

Small business should be encouraged to view employees as valued investments rather than commodities. They should consider that a trained employee who knows their job deserves to be adequately compensated. Or that someone performing mind numbing repetition for 12 hours a day to support themselves deserves more than $5.00 an hour.

Personally I think the minimum wage should be much more than $7.00 and hour. Who can live on that?

makes sense to me. Or they can charge their not poor customers more.

Look I support the minimum wage, people deserve to work for a company and get paid more then a measely $5.15/hr. I hear a Republican talking point that people working for minumum wage are nothing but school kids making a couple of bucks for College when in reality there are people that old enough to be my mom thst are working there as a career, a job to actually feed there families.

Those people deserve better then that

why should they be expected to work for less? that's always been 'their' excuse. oh, those are jobs for kids in school and then they move on. it's not meant for people to stay there. bullshit. every person doing the work deserves to be paid more than slave wages.

That's what they tell the PEOPLE who work for slave wages. If you can't make it on 5.25 an hour, too bad.

The government is in place to protect the people not businesses.

I simply do not believe that a minimum wage hike of the amounts being talked about will have any significant impact on small businesses. This is not an opinion held in a void, I have seen several studies and analyses that bear this out.

Furthermore tying the two things together is just a sham. We can (and should) look at various ways to encourage small business growth without tying it directly to a minimum wage hike. Bush is attempting to tie the two together in order to force through some legislation, likely a tax cut, which might not pass on it's own merits. Don't eat the fruitcake.

If a small business needs to pay its workers $1.00 an hour to stay in business, should they be allowed to? I'm reminded of my father in-law who ran a business slowly into the ground over a period of a decade, whining all the time about the minimum wage.

Not to worry about you that will support it.

four folks, one the owner. None of us work for minimum wage. I don't see how raising it will effect whether we stay in business or not. What will effect it is whether people can still afford to purchase pest services. The housing bust is a larger factor in our bottom line than a raise in the minimum wage.

he has a plan that includes tax breaks for small businesses.

How's that?

The people who benefit from these wage increases would plow that money back into the economy which means more sales revenue for the small business owner. Those industries that pay minimum wage have no labor cost advantage when everyone gets the same wage basis. If those costs are passed on to the consumer, he can decide if the product/service is worth the extra cost. Or the small business can find ways to absorb through greater efficiency.

Taxcuts for the super rich usually go into investment accounts and that money gets invested in high growth markets....which the USA ain't. I am a small business owner and I pay well above minimum wage, so this won't impact my bottom line, but everyone who works in the USA deserves a living wage and our government should care as much about the bottom 30% as it does with the top 5%.

I think this really scares Republicans and that's why they want to tack on some corresponding tax cuts. Why? Because they don't want to see the isolated results of a minimum wage increase on the economy. Including some taxcut package would allow that to be used as the reason for the economic uptick. We've had many taxcuts over the past few years, but the benefits have not helped the middle/lower class. A pure, unencumbered minimum wage bill will disprove the Republican CW that minimum wage increases hurt the economy/taxcuts help the economy, IMHO.

What I hear from so many minimum- and low-wage earners is that they shop at Wal-Mart because they can't afford to shop anywhere else. In some cases, these people are FORMER small-business owners whose retail businesses were shut down when a Wal-Mart or four moved into the community.

I make no secret of my loathing for Wal-Mart above all the other big-box retailers. If they in particular are legally obligated to pay their "associates" something approaching a living wage, I will cheer from the housetops.



Tansy Gold

At the place I'm moving to in the country, if I want to shop at Target I have to drive sixty miles one way. That's 120 miles. Even Wallyworld is 15 miles away. If I want to shop at Costco I have to drive back to Houston which is 140 miles.

What I'm saying, though, is that in many communities -- including small rural communities -- there used to be locally-owned stores at which local people could shop. Then along came Wal-Mart with their low prices and low wages, and they put a lot of those local businesses out of business. The former owners are now working for $7, maybe $8 an hour for the Walton family.

And because they don't make a living wage, they don't have much choice but to shop there; they can't even patronize what few local businesses may be left.

If Wal-mart is the only place, it's the only place. I don't expect anyone to drive (wasting all that time and gas) 120 miles if that's their only alternative.

But by the same token, if an increased minimum wage allows more people to avoid Wal-Mart, I'll be a much happier person.

the minimum wage to start, with increases after that.

You mentioned dollar stores. All the dollar stores around here are parts of huge chains that buy everything from China.

I don't think they qualify as small businesses.

with the giants?
Easy.

Institute a single-payer health plan that doesn't depend on employer contributions. As any small-businessman who has had to buy insurance for his employees can tell you, the big guys can negotiate low rates with the insurers simply because of their size (larger risk pools, more negotiating power). A single-payer plan would take this inherent advantage of giant corporations off the table. It makes me crazy that more small businessmen don't seem to realize this.

:toast:

Having 2 kids, I can't even THINK about working for a small business without medical.

The larger the company, the larger the pool of employees, the lower the administrative costs, the more affordable the medical insurance.

The economies of scale are, BY DEFINITION, unavailable to small businesses.

But with universal coverage, I could work for anyone...

We are *literally* ENSLAVED by medical coverage!

I don't think you're considered this carefully enough.

not only are dollar stores franchises, there's a real issue with some of what they sell.
like this. While I shop at these stores on occasion, I don't think they should be allowed this kind of leeway in product safety.

Our government is supposed to look out for our interests. That means a living wage, reasonable access to housing, education, healthcare, environmental protection, and food and drug safety. You know, the stuff they give to the upper 5%.

You know what all I did was ask a legitimate question about a serious issue, don't get on my ass about it. Every time I make a thread about something someone always got to bitch about what I have to say.

Don't get angry at me cause I have a question about something, this is every time.

Consider changing your opinion on the matter then if you don't like the flak.

Your theory is what's incorrect in the first place - expect us to correct your lies...

Every time I make a thread about something someone always got to bitch about what I have to say.

You're joking, right? This is a freaking political message board--most of us come here for a spirited discussion. :eyes:

I shouldn't be so cynical just because have a different viewpoint than me or is correcting me on something I said.

I need to loosen up when engaging in debates.

I must say this is a good debate right here and I thank you for giving me your viewpoints on this issue.

we should have plenty of supporters without you.

I had a legitmate concern, don't you dare rip on me because of it.

I do support rasing the wage.

We are three partners and one part time employee who we pay a **very** high hourly rate (she's a highly skilled professional).

The minimum wage will probably not hurt one damned small buisiness, but it mighjt affect the big guys who make their obscene profits on the backs of minimum wage workers.

Don't EVER think that 'protecting small business' is anything more or less than helping out the big fat cats. The real small business owners have always paid better because they offer less percieved security and fewer percieved benefits. In actuality, small businesses are better employers, overall, than the big companies. This whole thing is just pure bullshit.

Then I don't have to worry about anything now.

Let them raise it, I have no more concerns.

Hike the minimum wage - alone - first - period.

Keep the two SEPARATE.

FORCE the idiots to vote on it.

Then - MAYBE - consider a small business cut - only after ALL OTHER BUSINESS.

We've had enough tax giveaways to the rich.

Now it the time to help the common man/worker...

- as to if a minimum raise increase will impact the bottom line. The place where I used to work let go the part-time high-school file clerk when the last minimum wage hike occurred. Had her wages been increased, the office would have had to increase the wages of the rest of the staff proportionately. That translated to increasing the wages of 8 people. To avoid doing that, the owners let the high-schooler go rather than take an across the board hit on increasing wages.

Minimum wage increases don't just impact those few receiving minimum wage. When the person at the bottom of the payroll heap receives a hike, other employees must be increased accordingly. THAT is where the wage increase impacts small business the most.

Did their competitors not have to raise the wages of their employees too?
Did your company survive without the file clerk?
Does that mean it was an unnessessary position to begin with?
Why did they have to raise the rest of the staff anyway? Whenever anyone came to me with wage disparity issues like that (when I was a manager), I always just said that what other people were making was none of their business. How can a manager possibly respond to questions about what other employees are making? You can never fully justify that stuff- it is based on management judgment.

This strikes me as poor management. They may have actually been using the minimum wage increase as an excuse to fire someone they didn't want to keep anyway but didn't have the chops to take responsibility for it.

Take a look at the expenses you have that you don't need and give that money to your employees. Give yourself a cut and give that to your employees.

If your business is so shaky that an increase in pay will sink you, you are already lost. You can't afford to keep good people because they will go somewhere else and you will be in a training mode all your days. Pay people well, train them well, show them what is expected and let them get too it. You will be far richer than you are now.

Seriously. I would really like to know what businesses are paying minimum wage and finding employees.

It's impossible to find staff that will even consider a job at less than $7 per hour, usually they demand (and get) considerably more.

Oh and I'm a farmer so if you think ag workers are somehow getting screwed in this industry, think again. Even unskilled workers are far above min. My lowest level employees (Mexicans) all make $7.50/hour. The one who cleans stalls makes $10/hour and I am lucky, LUCKY! to have her at such a bargain rate.

It seems even burger flippers advertise at $8/hour everywhere I look. I just can't figure out what small businesses people are talking about that will somehow be hurt by raising the min wage. Nobody pays min wage as far as I can tell.

Here in Pittsburgh, it's pretty economically depressed. I think fast food workers start out at the minimum wage.

though in the short run, especially with the recession we've been in the last six years, this will cost some jobs and/or put some small businesses out of business.

I don't know if the Dems have any plans to protect small business, but if they do - Bush still has to sign it.

How will this put some small businesses out of business?
How would such a vulnerable company survive a heating bill increase? Or an increase in freight costs?

BFD.

if you can't pay your employees a living wage, you don't need to be in business.

on top of what they're already paying.

for some businesses it will be a "big fucking deal".

As a small business owner, I don't oppose increasing the minimum wage. But, before you start judging businesses in such a cavalier manner as you have - you should try running one sometime... unless you already are - in which case I hope the Bush economy is treating you better than it is me.... business wise, that is.

There are some legitimate concerns associated with adding the kind of additional burden to a business that a minimum wage increase will - especially in the middle of a recession.

------------------

Are you paying your employees that much? If so, do you mind telling me what business you are in? I struggle to find farmworkers at $7.50/hour and I am generous with perks such as boarding their horses for free, giving them free gas, making sure the kitchen is always stocked with water, coffee, tea and soda, flexible hours (all but my two full timers work other jobs besides working for me) etc. I am well aware that some of the work is hard (for example their tasks include things like scrubbing troughs or picking manure out of paddocks) but a lot of it isn't hard (cleaning tack, prepping horses to ride, feeding, taking down cobwebs etc).

These are unskilled labor tasks - none of my guys have any level of real schooling. A couple are illiterate and most of them can't speak english.

And before any of you say that it has to be personality conflicts that keep workers away, bear in mind that these guys work completely independently. My tasks never overlap with theirs and frankly, they do a damn fine job without any supervision (I mean, the trough is either scrubbed and refilled or it isn't).

But, if I could, I would have to pay them in the range of 8 or 9 dollars an hour. That's for skilled labor - or at least labor that would need to know something about what they're selling. I would probably have a hard time finding anyone for that price. That's
actually a problem that some of the small businesses I know of locally ARE having - they can't find employees because the wages aren't good enough - and they simply can't afford to pay more and be able to stay in business. It's a real bind, and it's mostly caused by the horrible state of the economy.

Which is kind of what I've been getting at in this thread. If the minimum wage is to be increased (and I believe it should be) then the government needs to put some other short term programs in place to help small businesses that will be hurt by the wage increase - and there are some that will be. A lot of restaurants pay minimum wage. There are still businesses that pay minimum - or less than $7/hr. Not many, especially in urban areas, but they do exist.

is what I'm getting at.

My sister is 50 miles west of Chicago and owns 2 restaurants and she pays everyone that is not wait staff in her restaurants, even the dishwasher at least $7/hr. Where did you hear that restaurants were paying min? I know wait staff typically have a very different pay structure but that is a whole nother kettle of fish that isn't really related to this discussion. My other sister owns a manufacturing plant 70 miles west of Chicago and every single factory worker at her plant starts at $8/hr. And she has lots of trouble staying at full employment level. I would love to find a business that is paying less than $7.50/hour and I will go poach those employees. Seriously.

I will say though that if paying someone $10 - 14k/year or so is too stressful for a small business then they shouldn't even be thinking of hiring additional staff. The owner needs to bite the bullet and work that extra themselves. There are a lot of positions I wish I could hire someone to do (bookeeping/taxes/payroll, another trainer, a groom, a mechanic....) but my small business can't swing it (yet :evilgrin: ) I hope you are getting joy out of creating something valuable for your community, being your own boss, trying out your own theories and seeing if one has the stuff to make them fly... the positive should outweigh the negative even if you are working very hard.

In the South, many people who work for small businesses only make minimum wage - or just a little above - because the cost of living here is not as high. But I still don't see how anyone can live off that. I made $9 four years ago when I went back to work after having been a stay-at-home Mom for two years - a divorce forced me back into the outside workforce - and I barely made it. Barely. There were days I starved so my son could eat and so I could pay the mortgage (which was cheaper than any rent) and the car insurance and the health insurance - on my son, I couldn't afford it for both of us - and gas to get to work, etc.

So, yes, there are businesses paying that - not in Chicago, I'm sure - but in smaller, mid-West or Southern towns.

I know that cost of living in an area has an affect on things, and urban areas will usually have a higher de facto min wage than a rural area, but my sister's plant for example, is in the middle of bumfuck nowheresville Illinois and she can't keep her plant fully staffed at $8/hr. And she's offering health insurance too!

I can't even imagine trying to live on $9/hr (shudder). I hope you are in a better financial place now! :hug:

i just gave my notice! wait, was that cavalier?

in the 10 years since the wage was last increased, $7 has become more like $5.25 was in 1996.

What burden? Every company would have the same obligation - status quo before and after the wage increase, right? What changes occur?

I have seen several references to these "legitimate concerns" but I can't quite get a handle as to what they are.

How small a business are we talking? $1M a year revenue? 1 minimum wage worker? A price increase of less than 1% would cover the cost.

with a profit of less than 50k. Mom and Pop's who might employ 1 or 2 people.

Perhaps a business that's just starting out? Most successful businesses take five years or longer to make it - and the overwhelming number of business start ups don't make it.

Any trickle down effect that would come from a minimum wage hike would take awhile to have any real impact for a business of this sort, I would think. That's the short term burden I'm talking about. Though, in reality, there aren't many businesses that would be effected by an increase right now because the min. wage has been artificially low for a good number of years. Still, some kind of tax break for the small number that might be affected would be appropriate

--------------

What I'm really talking about, I guess, is the "so what" anti-business attitude that many of the poster's on this thread have expressed. I don't think a lot of people understand the shoe string that a lot of small businesses run on. Or how narrow the divide between success and failure is.

Some folks are going to advocate the larger principle even if there is collateral damage involved, and they should. Somebody has to. Hell, I even do it myself on certain subjects I guess.

I am a small business owner. We are in our 10th year. I feel very fortunate for the company to have survived post-9/11. We lost about 20% of our business overnight. Took about 4 years to get it back. It was hard, but we were also just fortunate to have not pulled the trigger on business expansion- which we were on the cusp of doing at that moment. We have 5 employees (including me), none of whom make less than $20,000 per year.

I am still not convinced that you can attribute a business failure to the minimum wage increase. I certainly recognize that many very small companies are constantly on the edge, but really, this is no different that any other cost of doing business. If EVERYBODY'S expenses go up, sooner or later, prices will have to go up too. A company can absorb a little bit here and there, but eventually they have to make their nut to survive. A minimum wage increase seems like it should be the easiest thing to deal with because everybody knows that everybody else has to deal with it too. It's a wash. The only times I can think of that it would be a problem are:

- If our competitor was using undocumented workers and pays them under the table.
- If our competitor had a large cash reserve and could afford to make less profit for a longer period of time. (But of course, if that were the case, they could lower their prices right now and put us out of business.)
- We were in a market where we have to compete with foreign companies.
- We are not really profitable at all, but we had been shifting money around to hang on as long as possible, and this will just exacerbate our problem.


One other thing: It may take 5 years for a company to get itself established in a market, with a customer base, but there are very few companies, especially very small companies, than have the luxury of going 5 years without making a profit I would think. (Amazon being a notable exception.)

as a cost of doing business? If higher wages cause them to deduct more, it might land them in a lower tax bracket and they might end up better off than before the minimum wage increase. In any case, the current minimum wage is foolish.

the first $X are always taxed at a certain (marginal) rate (such as 10%); the next $Y are always taxed at a higher (marginal) rate (such as 20%), etc.

If the business owner has a slightly higher wage bill, everything else being equal, the net income will be slightly lower. His/her tax bill will be a little bit lower too (if any tax is due at all). But having more to deduct in wages does not change the tax rate on the rest of the income--it just eliminates some income taxed at the highest marginal rate that applies at that income level.

that gave out very generous bonuses for that reason.

The boss figured he'd rather give it to his employees rather then the IRS.

I start obsessing in September and make sure that by December 31 I have purchased equipment, paid out bonuses and expensed out anything that I can. Who knows WTF 2007 will bring. I have never paid out taxes for my business. Ag is especially distorted from special interest groups but my employees know that I am in their corner and making sure that business profits are working as much for them as well as me and the business. We always ALL go for a holiday lunch between Xmas and New Year's (my treat) and everyone knows, even the low-lee-ist employee exactly how they have contributed to the bottom line. Everyone's been with me at least 10 years, some of them more than 20.

:toast:

raising the minimum wage is only a meager attempt at forcing the wealthiest 1% to spread some of the wealth around. IMHO the minimum wage, by itself, solves nothing if the powers that be then raise the cost of everything to get back those few cents an hour from the bottom and the middle.

We need a better strategy for giving the bottom the opportunity to acquire decent food, shelter, medical care and education regardless of their actually dollar wage.

I think it has more to do with comparative incomes than absolute incomes.
If the rest of the workers have all been getting raises, even though prices are going up at least they get to keep up. The minimum wage earners are falling behind.

This wgae increase is less tha 1% of revenue of even the smallest companies that might hire minimum wage earners, so it doesn't seem like it would affect prices or inflation very much.

I'm not even sure that raising min wage will be "forcing" anyone to spread their "wealth" around since I believe many, if not most, companies that still operate or manufacture in the US are already paying more than min. Those companies that paid min (or less) have outsourced overseas already imho.

I'm beginning to believe that the fight over a min wage increase is just a symbol for the insidious and disturbing desire by Big Corp to keep workers powerless. This fight isn't even anything more than a paper tiger but it should open some people's eyes to how deeply hated and feared the average worker really is by their corporate masters.

I've always thought the decline in unions over the past 10 - 15 years is also tied to the min wage fight on several levels. Unionization is a great strength for ensuring fair living standards and observing who opposes unions exposes important truths about this fight.

It can do nothing, or it can hurt the economy. Labor is governed by supply and demand just like everything else; the minimum wage is just a price control. As long as the minimum is below the wage set by the market, it does nothing. If it is above the natural wage rate then it will result in either shortages of jobs, higher prices, or lowered profit margins.

Despite what people seem to think, many businesses cannot afford to lower their profits enough to cover an unnatural wage hike. I was working in a grocery store the last time NY raised its minimum. The store could not afford to cover the cost entirely from its own pockets, and couldn't afford to raise prices (as they were already failing to compete with WalMart). The only thing they could do was to stop hiring new people and cut employees hours.

While it didn't make a huge difference to current employees (loosing a few hours and gaining a few dollars made most break even), it did make a difference to customers (who now had less help and longer lines to face) and prospective employees (who now had to look for work elsewhere). While employees got to work a few less hours and still make the same money, the business as a whole suffered.

indicated by your post is Wal-Mart?

Just because mall-wart is ripping off their suppliers and their employees, that shouldn't cost those poor sods who have to try to live on the current minimum wage...

But WalMart isn't going anywhere any time soon, other businesses might be. The minimum wage doesn't help them stay opened, it only hurts their ability to compete.

Merry Christmas DU!

Due to their long supply lines, all their cheap crap from China, they are entirely dependent on cheap oil...one bomb on the state of Iran will put an end to cheap oil...then no more WalMart.

We should all be planning for the end of oil and determining how our local economies will work again in the future.

going to be able to afford your goods and/or services?

...it especially a major increase of roughly a dollar at a time. Many do end up closing and/or having to fire at least one worker.

The easy solution would be to have a dual raise system. Businesses with more than 5/10 workers could increase at the set rate (probably will be about a dollar) and those with under 5/10 workers could increase slower (25 cents a year). <<<This is just an example.

for businesses to eliminate jobs to avoid the higher wage brackets. It would end up having the same effect that a straight minimum does. The best thing to do with the minimum wage is to let it die and put our efforts towards legislation that actually helps small businesses and workers.

How do you know that? What makes you think so?

If business owners are thinking that this is an expense they have to absorb or else become uncompetitive, then I think they are just mistaken. Whatever conditions existed before an increase will be exactly the same after an increase. Just like any other increase in costs that we all subject too, we pass it on if we must in order to maintain profitability

Does in increase in fuel costs drive companies out of business? Steel costs?

I'm beginning to think there is something unsaid going on here. Is there some sort of underground way of doing business which isn't strictly legal that a wage increase would expose or something?

and even been shown the budget of one.

I don't see how one can say all small businesses can automatically/easily pay it. For many small businesses, the increase of a dollar *per hour* in wages literally makes the difference between profit and deficit as was the case of the small business I viewed.

We do about $1M per year. 5 employees including myself. We don't have any minimum wage workers, but if we did, I can't imaging having more than one. One person full time is about 2080 hours. The wage increase would be $2.10 I think? 2.10 x 2080 = $4368 per year increase. 4368/1,000,000 = .004. So, if we were right on the edge of profitability, and we had to raise prices to avoid losing money, we would raise prices by four tenths of one percent to make up the difference. If we sell something that used to cost $10.00, now we would have to charge $10.04. I probably wouldn't pass on that small of an increase like that though. If we did, we'd be changing our prices every time we got the electric bill or the credit card bill. We would either just absorb it for a while until some other costs also went up and then raise everything by 2 or 3%. Or, if we needed to do something right away, I would just add $1 to shipping charges or check our markups for various products, and if one or more is out of whack due to past increases that we have absorbed, raise those prices only.

But I'll be honest with you, I don't think a small company can survive if 4/10 of one percent is going to make the difference between success and failure. At that point, the writing is on the wall regardless of a minimum wage increase. That company needs to serioously be looking at ways to increase revenue and/or profitability. Even if your revenue is $300,000 it's still only a 1.4% price increase to cover it, and at $300,000 revenue it's got to be hard to justify having any employees, let alone a minimum wage one who likely needs training and supervision.

.. a raise in the minimum raise will have next to no impact on small businesses for 2 reasons.

1) Damn near none actually pay minimum wage. Fast food workers command more than minimun wage almost everywhere for example.

2) If all businesses have to raise their employment costs, they will all raise prices in tandem and there is no competitive issue at all.

There might be a tiny sales impact, as folks have to pay a couple percent more for something some might decide not to buy. Frankly, I'd rather live in a world where something costs a couple percent more, for rich and poor, if it means more people can earn somethign like a living wage.

then why bother having a minimum at all? If businesses have to raise prices to compensate for minimum wage hikes (and many will) then the wage increase is instantly reduced through price inflation. Couple that with job elimination and decreased customer service, and its easy to see why the minimum wage does no one any good. The best that can be said about it is that its currently too low to hurt anyone.

The time wasted on promoting the minimum should be put towards enacting legislation that can really help workers and small businesses, like solving Americas flawed health care system.

Other workers have been getting raises all these years, what about price increases negating their gains? As I have already said elsewhere, this is as much about comparative wages than absolute wages.

You uber-capitalists think that the free market cures all ills. Not true. Capitalist pressure is for labor wages to trend to zero. Remember slavery? China? Mexico? How many more people would be on social service programs without a minimum wage? Do you want to eliminate those too?

Do customer service people really make minimum wage? I would be surprised.

Any time in this discussion that is a waste is because these myths keep getting disseminated with no basis in reality and have to be challenged.

about survival of the fittest. No capitalist worth his salt would adopt a corporate strategy designed to keep his competition in business. It is about driving out the competition and becoming a monopoly.

It is the same for tha "labor market". Every employer wants to purchase his workers time for the lowest cost and thereby providing a larger share of the pie for himself. it all becomes a race to the top for a very few while pushing everyone else down as far as possible.

The only way to protect "small" businesses is by leveling the playing field. Trade laws, tariffs, labor laws and the minimum wage (et al) are steps to level the field and keep competition fair while ensuring workers a fair shake.

I just know a bad deal when I see one. In a discussion about the US economy there are certain basic truths that have to be accepted, one of which is that the price of good and services is determined by supply and demand. Labor is no exception to this rule, and the minimum is just a price control on the labor market. As long as it is below the natural wage rate it does nothing, but as soon as it goes above it the result is one of three things: fewer jobs, increased prices, or decreased profit. I'm sure I don't have to go into the likelihood of corporations voluntarily cutting their profit margins back, so we can assume that the first two results are the most likely.

As far as it goes, yes, capitalism pressures business owners to drive wages down. It's important to remember that it also pressures workers to drive wages up, and that in the end this will balance wages at a relatively acceptable level for both parties. Of course this won't always be the case, and it important to protect people from getting abused by the system. For what its worth, a minimum wage below market equilibrium does that (although its likely that people who would pay below the minimum aren't paying on the books anyway). As soon as the minimum goes above the natural level, it only hurts those it supposed to protect. The effort wasted on fighting for a minimum could be put to much better use, the suggestion about Congress fixing Americas lackluster health care system being a good example.

What is this "natural level"? Is it determined by the forces at play at any given moment in any given market? If the large corporations have the advantage, which they almost always do, they will be able to keep wages down by hiring undocumented workers, cutting benefits, and opposing a minimum wage increase. Who is speaking up for the bottom rung of the ladder of success? Why should the government be disqualified from having a hand in the game? Why is the corporate solution the "basic truth" that we must accept?

You haven't answered the question about why an increase in minimum wage is futile since it just results in a price increase anyway, but evidently it's OK for other workers to get a raise?

I believe your supply and demand scenario is false. Labor is not like steel or cement. It is people. As a society, we have decided that we can sustain our society best by doing what we can to provide the tools for every worker to be a productive member. This is not a jungle where the weakest die. We can help the weakest, and it is in our best interest to help the weakest because it costs more if we don't or they die in the street, which we have already decided is unacceptable.

Invoking "supply and demand" in reference to people is the absolute essence of what I would characterize as an uber-capitalist.

the natural wage rate is determined by the forces at play at any given moment in any given market. Our entire way of life is based on the supply and demand principle, and labor is not exception to the rule. Wages will naturally gravitate towards market equilibrium (the center point of the supply/demand X), which will generally be the most fair and beneficial rate. Of course both management and labor will wish they could slide it in their preferred direction, but the pull of both sides will usually result in a fair settlement. While it may seem that corporate management holds all the cards, this isn't true. Workers have many ways to affect change for their benefit, such as unions, job shopping, or simply not taking a job unless it pays high enough. In the same line of thought, raises are different from minimum wage because they take into account natural market conditions.

As for the rest of it, you are putting words in my mouth. I never said that the government should have no hand in the economy, FDR proved why it should 85 years ago. But the government shouldn't do something that will only hurt the people it is trying to protect, and that is what the minimum wage does.

I like having places to shop other then mega stores filled with cheap Chinese products. I like not having to wait in line for ten minutes because a store had to cut its hours back to cover a forced raise. I like getting things for a good price at a good business. I like it when people can find local jobs quickly and easily. I like it when stores can afford to let me buy American. The minimum wage works against all those things. The only people it helps are the huge corporations like WalMart that are glad to see their competition take yet another hit.

it is not some natural resource or supernatural effect that we have no control over. Where humans are concerened, the supply and the demand are created by those involved in the process. You are pitting established, powerful , profit seeking shareholders of corporations against temporary workers and those just starting out in the workforce and those on the fringe of competitiveness. It's no contest. Our government is the advocate for those workers. You would have us wait until there are riots in the street if that's where the natural law of supply and demand takes us? It's happened before; many people have died trying to gain things like a 40 hour work week, workplace safety, and civil rights. The French revolution was just an inevitable consequence of supply ands demand I suppose. Destined to happen again? We can do better.

What do you say to the families of all the people who fail while we wait for the big corporations to finally and collectively recognize that they should pay- make that HAVE to pay- a little more to the entry level workers? Does market equilibrium result in less pollution? There are many areas in which the government steps in becasue waiting for the "natural forces" to arrive at equilibrium is clearly detrimental to the community. We can do better.

... our entire economy is skewed towards those at the top. Executives of failing companies take home multi-million dollar salaries. Wall street traders who add nothing to the economy get multi-million dollar bonuses.

And we get dissed for asking for a couple more dollars an hour for menial labor. Tell you what, you may want to live in a third world country, I do not. And I'm happy to pay another 15 cents for a burger or nickel for a laundered shirt to stem our burgeoning problem.

There is always a line somewhere that is drawn by what minimum conditions society expects from business. Some businesses operate under economics that would make them impossible without forced slavery. Other businesses needed the wage that could be paid to children to be able to stay in business. It is no different than this. If the businesses cannot survive by paying people a decent wage then so be it, we are saying as a society that the minimum conditions needed to have a business are these and the government needs to help those that are displaced with training, incentives, and direct benefits payments if necessary.

In my part of the country, none.

I've worked in retail at many levels with companies that range from a mom and pop with three employees to an international company. Not one ever paid minimum wage. I find it hard to believe that raising it will affect many businesses.

small business should be hit no worse than large businesses. There are exceptions for seasonal labor and a few other things. But the minimum really should be $7.00/hour, if not more. I hire a certain amount of unskilled or semi-skilled labor for housing mainenance, cleaning and renovation, and wouldn't think of paying less than $10/hour cash. You can't really even really live on $7.00/hour. much less $5.25.

then we can do away with many of the costs that inhibit many potential businesses from setting up shop in America. I'm all for the minimum wage increase though. As communist as it sounds, wealth redistribution has to be a priority. The income gap is not healthy. In fact, it's downright dangerous. One way or the other, we need to put more money in the pockets of our poor and middle class folks.

During the period in the mid 20th Century when the minimum wage was at a higer level (in contemnporary dollars) small business did fine. Much better than today.

It's not because the minimum wage was higher, but it didn't hurt.

in the way of higher prices.

A better way to attack this problem would be to increase the EITC (Earned Income Tax Credit).