Lifting the minimum wage big deal for small firms

Published on NewsOK Modified: January 29, 2014 at 5:27 pm •  Published: January 29, 2014
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NEW YORK (AP) — The dollar amounts may seem modest, but proposals to lift the minimum wage are a big deal for small businesses.

It's an issue that affects large and small companies. But larger companies are more likely to have the financial resources to absorb higher payroll costs.

Opponents say a higher minimum wage could force businesses to lay off workers. Supporters say a fatter paycheck will make employees happier and more productive, and help companies attract better workers.

The debate over the minimum wage has intensified. President Barack Obama said in his State of the Union address he'll sign an executive order requiring companies that have new federal contracts to pay their workers at least $10.10 an hour, up from the current federal minimum of $7.25. Voters in New Jersey approved, in November, a $1 increase in the state's minimum wage, to $8.25 an hour.

Bills to raise the minimum wage were introduced in more than 30 states last year, with increases approved in four. In his speech Tuesday, the president encouraged state and local lawmakers to raise wages. Congress has deadlocked on most legislation amid partisan rancor ahead of the coming midterm elections.

"To every mayor, governor, state legislator in America, I say, you don't have to wait for Congress to act," Obama said "Americans will support you if you take this on."

About 3.6 million workers have wages at or below the federal minimum, according to the Labor Department. That makes up 4.7 percent of workers who are paid by the hour. It's not known how many work for small businesses.

The Associated Press spoke with small business owners, advocacy group leaders and business experts about the minimum wage debate. Here's their take:

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WHO: Steve Holand, owner of Carry Cases Plus, a manufacturer and distributor of carrying cases for tools and other equipment in Paterson, N.J. It has 31 employees, 12 at minimum wage.

WHERE HE STANDS ON HIGHER MINIMUM WAGE: Opposes.

WHY: "We've pretty much cut our expenses to the max. There's nowhere else to cut except to cut employees or raise prices. If we end up doing this (paying workers more), it puts us at a competitive disadvantage."

"If we raise our prices, we hope people will pay the higher costs. If they go elsewhere, we'll end up laying people off."

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WHO: Don Peebles, CEO of Peebles Corp., commercial real estate development company based in New York, has 97 employees, none at minimum wage.

WHERE HE STANDS ON HIGHER MINIMUM WAGE: Supports.

WHY: "You get what you pay for. If you have better paid workers that are working and earning a living wage, they will be more productive. If you have better financial incentives, you'll have better performance."

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