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This minimum wage increase has already been instituted in several locations such as San Francisco and Flagstaff and this article is not meant to discuss the plusses and minuses of enacting the policy. That decision is made a long way from Show Low.

SHOW LOW — Most believe in the next few weeks Congress will enact a federally mandated minimum wage of $15 per hour. This is expected to be like other federal laws in that local businesses will not be able to ignore it or “get around it.” It will be here to stay.

One of our most important functions at the Small Business Development Center hosted at Northland Pioneer College is to assist our small businesses to see the future and prepare for that future. This minimum wage increase has already been instituted in several locations such as San Francisco and Flagstaff and this article is not meant to discuss the pluses and minuses of enacting the policy. That decision is made a long way from Show Low.

This article is to point out “lessons learned” in these other locations and assist our small businesses prepare for the possible enactment and minimize any disruption.

The main question for the small business owner is “Where does the money come from?” There are four possible answers to that question and fortunately we have had small businesses go before us so we have some information we can study. The successful business will probably have to use a little of all four.

Know your business

Is there some places where you can cut staff to keep your employee expenses roughly the same? This is the time to take a hard look at the productivity of your staff. If you have an individual who is not pulling their weight this might be the time to act. This is not a new strategy and in many of the locations where the $15 minimum wage has been implemented total employment has gone down.

The business absorbs the extra cost

All of you who own a small business understand that the margins are simply not high enough for most to pay this addition amount and not pass on that least part of that expense. However, many companies who have already faced this situation have been concerned that their client flow would decrease with any increase in price thus they do not pass it on. This is a decision that the individual must make but the numbers are against you if you try to absorb the entire cost.

Creeping price rise

Companies have tried to raise prices slowly to compensate for the increased wages so that consumers slowly become accustomed to higher prices. However, many report that the first couple price increases are understood but after that the “bad guy” becomes the owner.

“Pull the Band-Aid off”

When the increase in minimum wage first comes out companies who have immediately done a price increase report that consumers are shocked and upset but the blow back is not generally at the owner because the minimum wage increase is so much in the news. It is important to start educating your customers now that if the raise is enacted you must do a price increase. Remember your customers have kids home and job concerns and may not have even considered this. Your education will help. As many small businesses are crawling out of pandemic none of us saw coming it is now time to look forward to see the challenges ahead. Let’s put our businesses on the best footing to succeed.

The Small Business Development Center (SBDC) hosted at NPC instituted the recent “Please Buy Local” campaigns and is funded to assist companies grow and prosper. Call 928-965-8679 or register for no-cost assistance at npc.edu/sbdc.

(8) comments

Gandolf

People who are against a $15 minimum wage have never had to make a living on such measly wages. That wage is barely enough to keep food on the table, much less take care of ever-increasing expenses such as rent and health care. If you are a business owner who wants to get rich by not paying your employees what they are worth, then you shouldn't be in business.

Justsayin141

Well said Gandolf

ppetersen55

Minimum wage was never intended to be a "living wage." It is an entry-level wage, intended for those who are just entering the job market. In reality, the minimum wage should be $-0-. It should be determined by a willing employer and a willing employee. Why should an employer pay $2X if their employees are willing to work for $X? On the other hand, if an employer cannot find employees who are willing to work for $X, they they may have to pay $2X, or maybe $3X, or more - until they can obtain the number of employees they require. It is basic supply and demand.

Vtrone

With the authority provided congress in Article 1, Section 8 of of the Constitution, the Fair Labor Standards Act of 1938 was signed by President Franklin D. Roosevelt and enacted. Included in this legislation were federal regulations for minimum wages, child labor, and overtime pay. The federal minimum wage was designed to create a minimum standard living to protect the health and well being of employees. The Fair Labor Standards Act does not say that the primary purpose of a minimum wage was for entry level jobs only.... that is not correct. Additionally, some states have already passed their own laws raising the minimum wage higher than the federal minimum wage and still business continued to prosper.

Clown2

If minimum wages had kept up with inflation, most economist agree it would be around $24/hour. It has to move eventually, so $15 seems reasonable. Of course employers will need to increase the prices of their products. The low and middle class workers have been losing ground since around 1980 (if you don't believe me, look it up). I'll pay higher prices so folks around here can afford rent and food and just maybe some extra for their kids. Is that asking too much.

Vtrone

It's a well known fact that the majority of customers for small business are working people. Therefore,it's ironic that if working people cannot earn a fair wage then they will not have any money to spend on small businesses. Moreover, the more people that are in poverty wages only means that the number of people on government social programs will also increase.....and who pays for that ...the taxpayers. Clown2 makes a very good point about keeping up with inflation, I would like to add that inflation is not just caused by prices going up but also by product shrinkage. Consumers pay more and get less product.

2rusty

Very discouraging to see all of the support here for a $15 minimum wage. Anyone who's run a successful business (not propped up by taxpayer dollars) knows that the market will determine the appropriate wage for different positions in different geographical areas. Forcing unrealistic wages on businesses only results in more people on welfare. A democratic dream.

Vtrone

If business entities can get billions of dollars of working taxpayer monies allocated to help them through rough times and if business can deduct employee wage expenses, then increasing the minimum wage for working families to keep them out of poverty and out of government run welfare programs would also have the benefit of churning the nation's economy and thus increasing business profits (ROI). The reason that american people of low wage, low income are given stimulus monies in times of recessions is so that they can have money to spend on services and products from business, thus, creating business profits, more orders for distributors and manufacturers, churning the economy. A simple equation: "Supply and Demand" or as is the democrats philosophy on economics is called... "The Trickle Up Theory." Democrat President Franklin D. Roosevelt is quoted as saying," The test of our progress is not whether we add to the abundance of those who have much, it is whether we provide enough for those who have too little."

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