Is your company in retail? Are you looking to hire more employees? Are you concerned about the various campaigns around the country to raise the state minimum wages? Would you like to learn more about how minimum wage laws can impact businesses, especially in retail industries? Well, the good news is that there might be less to worry about than you might think—especially if your company is a small business in the retail sector. Don’t fear the minimum wage.
The federal minimum wage is currently $7.25, after being increased in 2009. And right now there are various grassroots campaigns designed to increase state wages. For example, in Pennsylvania, State Senator Christine Tartaglione recently introduced legislation that would raise the state minimum wage from $7.25 (equal with the federal minimum wage) to $9 an hour. This increase has local businesspeople a little nervous, but it might not be as big a deal as they think.
Most economists, and most economic research, supports the idea that higher minimum wages doesn’t hurt retailers—and it can significantly help small business retailers. Higher minimum wages does mean fewer teenagers in the American workforce, which has debatable consequences, but many economists argue that a higher minimum wage would be equivalent to a huge stimulus package—leading to higher disposable incomes, and more consumption. Business Insider even said that “retailers of large durable goods tend to see immediate sales benefits.” But for small businesses, the benefit could be even greater. According to statistics from the Fiscal Policy Institute, small businesses in states with higher minimum wages saw better growth than businesses in states where the wages were lower.