Monterey Herald: Gary Gerber: New minimum wage good for business

Op-Ed By Gary Gerber
Monterey Herald, May 8, 2016

I’ve been a small-business owner for 40 years. When I founded Sun Light & Power right out of college, solar wasn’t widespread like it is now. But today, we design and build residential and commercial solar electric and water heating systems for customers throughout the state. Paying our employees a living wage — and more — has always made good business sense to me. Now the state is finally catching up by enacting a $15 minimum wage, and I couldn’t be more pleased.

Small businesses support California’s economy by employing its residents, paying taxes and generating economic activity. The state in turn supports us by providing roads, bridges and ports, public transportation, an educated workforce and emergency services, just to name a few.

The economy is a two-way street, or perhaps a better analogy is a multi-lane freeway. If you run a business, whether you have three employees, 300 or 3,000, you rely on others: your employees, your customers and the government. Let’s look at the impact a $15 statewide minimum wage will have in these areas.

Employees: Businesses thrive when employees are happy, healthy and productive. They are more loyal, and far more likely to give that 110 percent when you need it. When your employees aren’t stressed about how to pay their rent or other living expenses, they can focus better on helping you serve your customers and build your business.

Customers: Most California businesses are small businesses like mine. We rely on the local and state economy for our businesses to prosper. Raising the minimum wage will put more money into the hands of workers who are most likely to spend it, reinvesting in the local economy. That money helps other businesses in your community, who are also able to pay a better wage that allows their employees to buy your product. It’s a beneficial upward cycle.

Government: Workers are taxpayers as well as customers. Workers can’t shelter their income like multinational corporations and the wealthy. They aren’t sending it to offshore tax havens. Putting more income into the hands of workers strengthens the tax base, which allows the government to better fund the infrastructure and public services that benefit all of us.

There are other business advantages to raising the minimum wage, such as reduced employee turnover. This can be a huge expense for businesses. It hurts productivity, product quality and customer satisfaction. It hurts innovation and growth. Paying a living wage reduces turnover and helps a business owner concentrate on what really matters in their business rather than regularly spending their time interviewing and training new people.

And for business people who worry that you can’t be competitive if you raise wages, think about this: You aren’t doing this alone. By gradually raising the minimum wage statewide, we level the playing field for all businesses.

Raising the minimum wage to a living wage represents a long-term view, an investment in our economy now and for the future. A state that supports its residents in creating a robust economy, an economy of abundance rather than scarcity, is a state I want to live in and continue to invest in.

Gary Gerber is president and CEO of Sun Light & Power based in Berkeley and a member of Business for a Fair Minimum Wage.

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Copyright 2016 Gary Gerber

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