Policy Points: 5 Business Reasons for Raising the Minimum Wage

By Brian England

Recently I was asked, “Why do you support raising the minimum wage – aren’t all business people against it?” As a small business owner I care about running a profitable business. That means I also care about the local economy my business depends on. And most importantly, I understand that economies boom when more money is in the hands of those most likely to spend it -- from the lowest-income earners buying essentials to a growing middle class with more disposable income.

Today’s eroded $7.25 an hour federal minimum wage has a third less purchasing power than the minimum wage had in 1968. When minimum-wage workers can’t even afford necessities and the middle class is struggling and shrinking, our customers and our economy suffer.

Please consider these five reasons for raising the minimum wage, and then add your name to the growing list of business owners and executives across the country who know from experience that this is the way to boost local business and our national economy.

1. Good for local business

When some businesses pay so little their employees can’t make a living, it hurts everyone. I run an auto repair company, and in recent years, I’ve seen more people having to choose between replacing bald tires and putting in a new battery, for example. We’re not talking about luxuries here. It’s bad for workers and businesses that people working full-time have to make choices like that.

2. Good for families

According to the Economic Policy Institute, raising the minimum wage to $10.10 by 2016 as currently proposed would raise the incomes of 28 million Americans. Women would particularly benefit because they tend to work for lower wages than men. Fairly compensating all employees leads to a more stable and sustainable workforce, and on top of that, it‘s the right thing to do.

3. Good for economic recovery

The middle class has shrunk as almost all the income gains in recent years have gone to the richest 1 percent of Americans. To get the economy back on track, the bulk of spending power has to be in the hands of those who actually spend it in the real economy. That means regular people, not the super-wealthy who tend to hoard wealth or invest it on Wall Street or overseas, not Main Street.

4. Protects workers from abuse

A higher minimum wage would also help to mitigate the abusive, exploitative working practices of a number of employers, who take advantage of the currently low minimum wage to seek cut-rate help. An unreasonably low minimum wage encourages employers to be shortsighted and churn through workers often desperate for any hours they can get, rather than train a more stable, more productive workforce.

5. Pressure off the safety net

Putting money in the hands of those who need it raises them up and away from the social safety net. It is time for those businesses that pay rock-bottom wages to pay their way. This will level the playing field, stop penalizing socially responsible businesses, and reduce the need for government assistance to fill in gaps left by employers who pay poverty wages.

We have been in business since 1978 and our company has won many awards, including Maryland Small Business of the Year. Our employees are a big reason why. Other employers will find that a higher minimum wage reduces employee turnover and improves customer service.

Raising the federal minimum wage to $10.10 over three years and then indexing it to inflation will help get our economy back on track. That’s why many business leaders support raising the minimum wage from small businesses around Maryland and across the country to large businesses and organizations like Costco and the American Sustainable Business Council.

Image credit: Flickr/stuartpilbrow Brian England is co-owner of British American Auto Care Inc., in Columbia, MD and a member of Business for a Fair Minimum Wage. Policy Points is produced by the American Sustainable Business Council. The editor is Richard Eidlin, Director – Public Policy and Business Engagement.