The minimum wage continues to be a major issue to politicians as well as small business owners.
But I was reading recently that in a 2014 study from the nonpartisan Congressional Budget Office, it was found that raising the federal minimum wage to $10.10 an hour would reduce job creation by 500,000 over two years. I found this to be a startling assessment.
But, the report also estimated that the increase in the federal minimum wage would raise the pay of 16.5 million workers who kept their jobs. Versus those who jobs were eliminated to cut costs.
In the article I read it showcased this example of the effects of a minimum wage increase:
A Swampscott, Mass., candy maker Bacci Chocolate Design Inc., parent of the CB Stuffer brand, had to sell its retail store, which employed about five part-time workers, in 2015 and invest about $50,000 in equipment to automate routine tasks at its production facility, according to owner Erin Calvo-Bacci. “It’s very hard to find a worker off the street that has the skills to command an $11 or $12 wage,” said Ms. Calvo-Bacci. “At that rate we can’t afford to be patient with someone who is less productive.”
Some small businesses are working on razor thin margins and forcing wages higher artificially forces owners to make decisions based upon cash flow only.
Not many truly believe that the minimum wage is a great tool for helping the bottom of the labor force. I would prefer to not have to pay my kids $15 an hour to clean my office and run the garbage out.