By Kent Ross
Distributed by American Forum, July 23, 2009

— As a small business owner, I find that people expect me to grumble about the increase in the federal minimum wage to $7.25 an hour as of July 24. But I’m not grumbling. In fact, I think it should be raised further.

Every time the minimum wage goes up, I find that new customers come to my bicycle shop because they have more money to spend, and some of my old customers buy more when they visit. With the economy in the slump it’s in today, this kind of boost in consumer spending not only helps individual entrepreneurs, but helps the country as a whole to recover.

I understand the critics’ point of view that a higher minimum wage puts a strain on small businesses’ ability to meet payroll. But I’m a living counterexample, proving that the additional revenue from customers with more to spend often outweighs the extra expense. Small businesses have so many problems – competition from untaxed internet sales, unaffordable health coverage, the weak economy – that 70 cents more an hour is the least of our worries.

Living wages make good business sense. Even though I could have gotten away with paying my entry-level workers the minimum wage of $6.55 this past year, I chose to offer $8 an hour or more instead. I find that paying better wages gives me more applicants to choose from, and I can expect more from them. Well-paid employees stay on the job longer, which saves me training costs as well. Like Henry Ford, who paid a generous $5 a day so that Ford workers could buy a Model T, I want to enable my employees to buy my wares.

I advertise my bicycles as a specialty product, so my customers expect better service than they would get at a big-box chain store; better service comes along with paying a living wage. If my competitors are required to pay a living wage as well, that keeps me from being undercut by businesses that cut corners.

It’s also an issue of fairness. While the new rate of $7.25 puts a welcome $28 a week more in the wallet of a full-time worker, it’s still not a living wage. Perhaps a single person in Oklahoma City could live frugally on $8 an hour. But what about a single mother with two kids? What about expensive areas like New York City? At least $10 an hour, as called for by the Let Justice Roll Living Wage Campaign, is needed to make every job a decent job.

With the minimum wage so low, many employed people qualify for Food Stamps, fuel assistance and other government programs. We can either pay for welfare programs with our taxes, or we can require that everyone gets enough in their paycheck. I think giving them a living wage has more dignity. I would be ashamed if an employee of mine had to turn to public assistance or else go without heat or food.

Along with 900 other business owners and executives from every state, I signed a statement sponsored by Business for a Fair Minimum Wage in favor of raising the minimum wage further. No future hikes are scheduled after this week’s increase, so the minimum wage will be stuck at $7.25 an hour until Congress acts.
Economic stimulus doesn’t only mean building roads and bridges, hiring more teachers, and bailing out banks and auto companies. It means putting money into the hands of people who will spend it immediately at small businesses like mine, which will in turn spend more on supplies and hire more workers, thus reviving the economy.

I’ve always believed that a rising tide lifts all boats. The more money that’s in circulation, the better off everyone will be.
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Ross is the owner of Al’s Bicycles Northwest in Oklahoma City and a member of Business for a Fair Minimum Wage (www.businessforafairminimumwage.org).

Op-ed published in Dalton Daily Citizen (GA), Madison Capital Times, Southtown Star (IL), August Free Press (VA), The Reporter (CA), Pocono Record, and numerous other newspapers.

Copyright 2009 Kent Ross