Contrary to conventional wisdom, growing numbers of businesses say increase in minimum wage is good for the bottom line
The Chandler & Brownsboro Statesman, 7/26/07
On July 24, for the first time in ten years, the federal minimum wage will go up - marking the end of the longest period without a raise since the minimum wage was enacted in 1938. Many Texans will get a raise from $5.15 to $5.85 next week. In fact, Texas has more workers affected by the three-step increase in the minimum wage to $7.25 than any other state. Contrary to conventional wisdom, many businesses are cheering the raise.
Jean Hardy, Owner/General Manager of Front Street Books in Alpine and Marathon, said, "In this wealthy society, I cannot in good conscience pay merely the current minimum wage, and that decision has benefited my business - not hurt it - because my employees know how I feel, and it instills loyalty and trust. As the cost of living continues to rise, wages need to reflect that. The soundness of families in this country depends on a decent wage. As business owners, I believe we have a moral obligation to do the right thing for our employees."
The chief executives of Costco, Addus HealthCare, Eileen Fisher apparel company, Small Business Majority, the US Women's Chamber of Commerce; Bernard Rapoport, chairman emeritus of American Income Life Insurance Company, headquartered in Waco, TX; and small business owners from every state, including Texas, are among those saying a raise for those at the bottom won't hurt the bottom line. As Costco's CEO Jim Sinegal, has put it: "Raising the minimum wage is good for business."
States with minimum wages above the federal level have had stronger small business and retail job growth than the other states.
The minimum wage is scheduled to rise to $5.85 next week, $6.55 on July 24, 2008 and $7.25 on July 24, 2009. However, the minimum wage has been so eroded over time that even with the new raises; workers will have less buying power than minimum wage workers had half a century ago. Even after rising to $7.25 in 2009, the minimum wage will still be lower than it was in 1956, when it was $7.65 in today's dollars. It will be much lower than it was in 1968, when the minimum wage peaked in value at $9.56 in today's dollars.
In a statement with nearly 800 signers and climbing, business leaders from Texas and all around the country assert:
"Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation. We cannot build a strong 21st century economy when more and more hardworking Americans struggle to make ends meet. A fair minimum wage shows we value both work and responsible businesses. A fair minimum wage is a sound investment in the future of our communities and our nation."
In the words of Gary Theilen, owner of Theilen Farm and Cattle in Enid, Okla, "As a small business owner who has always paid well above the minimum wage, it has been my experience that paying living wages simply makes good business sense. It is good for business, workers and the community. "
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