Minimum Wage Increase

10 Pages 2561 Words

imum wage to $7.15 per hour. An overall increase of 2 dollars seems great, but what will happen because of this increase? So far, not much, but many economists are predicting many financial woes for small business, the consumer, and even the federal government.
When the minimum wage is increased, businesses who hire minimum wage workers will be burdened with an increased cost of labor. For large corporations with millions upon millions of dollars in sales, paying a simple worker a dollar or two more an hour is not going to hurt them as bad as it would smaller businesses, who only rake in several thousand dollars in sales a year. State director of the National Federation of Independent Business said the increase is “akin to voting for a $2.8 billion tax hike on small businesses.” He has also said that this increase in New York would be giving almost 700,000 minimum wage workers a $4,100 annual pay raise. Small businesses hire many people for minimum wage jobs, and simply cannot afford this much more per year per employee. With this increase, these small businesses will have to do something to cope with the money lost in wage costs. There are several easy solutions to the problem, but all of them harm some group of people in some way. These businesses could fire some employees, increase the states unemployment rate, and force the state to pay more unemployment money. They could also raise their prices, forcing their customers, who might not have received a raise, to pay more for their product. The third solution is to make a cheaper product, sell it for the same price, and upset some loyal customers. Which ever path a business wishes to follow is their own choice, but which ever path they take, there is some type of misfortune waiting at the end.
Employment cost should be the small businesses owner’s biggest worry, but there are several hidden costs. If we can use the comparison of cell phone bills, this is what the small business...