By Dan Marticio
Lending Tree, April 16, 2021
... Pros of raising the minimum wage ...
IMPROVES EMPLOYEE RETENTION
Higher wages could help employers retain their workforce because employees have less incentive to seek higher-paying employment elsewhere. Reducing employee turnover could be a boon to a business’s bottom line.
“There are all sorts of cost savings and bottom-line benefits to slowing down turnover and being able to retain employees to the tune of thousands of dollars per employee per year,” said Alissa Barron-Menza, vice president of Business for a Fair Minimum Wage, a national network of business owners and executives who support the fair minimum wage increase.
High turnover often leads to added costs related to onboarding and training. The amount saved from employee churn could help employers manage some of the increased labor costs.
INCREASES DEMAND FOR GOODS AND SERVICES
Higher minimum wages would disproportionately affect lower-income households positively, as these households tend to spend a larger percentage of their income. This could lead to an increased demand for goods and services. Therefore, raising the minimum wage may have a stimulative effect on the economy.
“When we raise the minimum wage, we’re putting money in the hands of people who most need to spend it,” said Barron-Menza. “[T]hey turn right back around, and they’re able to replace tires and buy shoes and school supplies for their children, and take family members out for a meal at a restaurant.”
BOOSTS EMPLOYEE PERFORMANCE
When employers invest in their employees by paying them adequate wages, employees generally respond with improved efficiency. Raising pay could lead to better performance, higher customer satisfaction, increased morale and lower error and accident rates.
“[Employees] who can afford to stick around long enough to know the business very well help the business stay in touch with what customers want,” Barron-Menza said. “And, really, employees make the difference between a repeat customer and a lost customer.” ...