Op-Ed By Ashraf Hijaz
Montgomery Advertiser, July 28, 2020
I opened Beauty and Beyond, a beauty supply store in Montgomery, in 2001. Since then, I’ve expanded to 25 stores across six states and own two furniture stores, with about 150 employees.
During my nearly 20 years in business, I’ve learned a key lesson: When people make more money, they spend more money, and that’s good for business.
July 24 marks 11 years since the federal minimum wage was last increased in 2009. It’s the longest period without a raise since the minimum wage was enacted in 1938 to help workers, businesses and the economy recover from the Great Depression. Now, during another crisis — arguably the worst of our generation — it’s time to raise it again.
I saw firsthand the economic effects paying higher wages has on business in 2007, during the Great Recession, which hit my business hard. In fact, I was concerned I wouldn’t make it.
But that same year, the Montgomery Hyundai plant kicked production into high gear, doing a hiring blitz and paying good wages. Many Hyundai employees were customers at my stores, and thanks to their patronage, business rose 20%. It was then I saw a clear connection: Higher wages increase consumer demand and spending at businesses like mine. Without those workers with money in their pockets, I probably wouldn’t be in business today.
Now our country is facing the dual crises of a pandemic and economic disaster. Congress has passed some large relief packages for workers and businesses to fight the pandemic and prop up our faltering economy, but we’re still in trouble.
One surefire way they could help workers, businesses and communities survive is to raise the federal minimum wage, which is just $7.25 an hour — about $15,000 a year.
Working 40 hours a week, someone earning the minimum wage can’t affordably pay rent for a one-bedroom apartment anywhere in the country, according to the National Low Income Housing Coalition’s just released “Out of Reach” report. With the minimum wage so low, many of my potential customers simply do not have enough income to spend money at my store. Every cent goes to paying for basic needs like rent, groceries, transportation and healthcare.
Earlier this year when Congress enacted expanded COVID-19 unemployment benefits, it provided many workers in communities where we do business with more money than they made as full-time workers at low wages jobs. With this boost, after business declined in April, my stores had a better May and June this year than last year, selling pandemic supplies like masks, sanitizer and gloves, along with our usual products. It’s not just my business, either. The JPMorgan Chase Institute found that the enhanced unemployment benefits led to higher consumption nationally for those receiving unemployment benefits.
If temporarily boosting people’s incomes can create this effect, imagine what we can do if we permanently raise wages.
Increased consumer spending isn’t the only business benefit from raising the minimum wage. I pay my staff above the minimum wage and it helps with employee retention and morale, which lowers my recruiting and training costs and helps keep my business stable. What’s more, healthier, happier employees take better care of my customers, which keeps them coming back.
The entire country would benefit from a higher minimum wage. It should be part of a long-term solution to promote the shared recovery of businesses and communities and strengthen our economy. Last year the U.S. House of Representatives passed the Raise the Wage Act, which would gradually raise the federal minimum wage to $15 by 2025, giving businesses time to phase in increases. But the Senate has not acted.
It’s long past time for action. We’ve seen throughout the pandemic that large-scale changes can happen quickly. This is one change that can’t wait any longer. It’s time to raise the wage.
Ashraf Hijaz owns a chain of Beauty & Beyond stores in Alabama, Georgia, Florida, Louisiana, Tennessee and Texas, as well as two furniture stores in Alabama. He is a member of Business for a Fair Minimum Wage.
Copyright 2020 Ashraf Hijaz