SHRM HR News: Is a Federal Minimum-Wage Hike Good for Business, or Does It Cost Too Much?

By Roy Maurer
SHRM HR News, February 5, 2019

Congressional Democrats' recently announced plan to raise the federal minimum wage has reset the stage for an enduring argument: Do minimum-wage increases lead to more prosperity or fewer jobs for low-wage earners? Democrats in the House and Senate introduced legislation Jan. 16 that would gradually increase the federal minimum wage from $7.25 an hour to $15 an hour over the next five years. ...

Advocates: Higher Wages Can Be Good for Business

... A minimum-wage increase would boost the economy, said Holly Sklar, the CEO of Business for a Fair Minimum Wage, a nationwide coalition of employers. "Workers are also customers. Increased pay means increased consumer buying power."

Raising the minimum wage will pay off in other ways, Sklar said. "Businesses that are more invested in their employees have employees more invested in the business. When workers are paid enough to live on, they don't have the continual stress that comes with figuring out how to provide for themselves or their families."

Michael Lastoria, the CEO of &pizza, a popular chain of pizzerias on the East Coast, wants to prove those points. The starting pay at &pizza is currently a dollar or two above the state minimum (the eateries are mostly located in the Washington, D.C., area, with additional locations in New York City, Philadelphia and Miami), but the company intends to implement a starting wage of $15 an hour across its locations.

The reason: "When you take care of your people, they take care of your customers, and your business thrives," Lastoria said.

His company's absenteeism and turnover rates are "better than average," he said, but the real difference has been a boost in workplace culture.

"Our employee morale has skyrocketed and with it our customer experience and our bottom line. Happy employees drive sales. Customers coming back, engaging and re-engaging, increases revenue. Our employees have become our loudest brand ambassadors. People want to work for companies that they believe actually care about the greater good." ...

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Copyright 2019 SHRM


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