Majority of Small Business Owners Say the Minimum Wage isn’t a Living Wage

Home » Small Business » Small Business News » Majority of Small Business Owners Say the Minimum Wage isn’t a Living Wage

Majority of Small Business Owners Say the Minimum Wage isn’t a Living Wage

As the 2020 presidential election draws nearer, the subject of a “living wage” has again proven a hot topic — especially among Democratic primary candidates. Meanwhile, in recent years, a number of cities have passed their own initiatives to hike the minimum wage to $15 an hour or more. Throughout discussions of such moves, there’s been a focus on small businesses that some argue would be hardest hit by increasing wages. Now a new survey from SCORE and online lender OnDeck shows that, while business owners tend to agree that the current minimum wage is not a “living wage,” there’s less consensus about whether or not that should change.

First, 73% of respondents said they did not believe that the minimum wage was a living wage, with just 11% stating the opposite. However only 44% went on to say that the current minimum wage was too low. In fact 40% said they believed it was about right and 16% states it was too high. It’s important to note that the survey inquired about the minimum wages in each entrepreneur’s own state, so that could also be a factor in the split responses.

In terms of how increased wages might impact their businesses, 55% of those surveyed theorized that they would hurt them. Additionally 44% suggested they would need to cut back on other investments in order to accommodate an increase in the minimum wage. That said 16% said the higher wages would actually benefit their business while one-third were confident that they wouldn’t need to scale back on other investments as a result.

Another split among respondents came when asked whether they would raise wages proportionally if the minimum were to go up. In other words, if their lowest-paid employee’s wage increased by $2, would workers already making more than the minimum also get a $2 raise? To that inquiry, 37% said they would make proportional adjustments while 34% said they would not. The remaining business owners weren’t sure what they would do in such a situation.

Summing up the survey’s findings, SCORE CEO Bridget Weston said in a statement, “This data shows that the majority of small businesses have a very small staff, and that a majority already pay their staff more than the minimum wage. For the majority of small business owners, the question is not whether the minimum wage is appropriate at a state level; rather, it’s how they will respond to an increase, whether that means adjusting other employees’ wages proportionately, or investing differently in their business.”

This latest survey once again highlights the complexity of the minimum wage issue. On the one hand it’s clear that small businesses do want to do right by their employees but, at the same time, may not be able to afford mandatory raises. Of course, with such conversations often tied to party politics, you can bet we’ll be hearing much more about minimum wages and living wages throughout 2020 and beyond.

Comments

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

Other Articles by Jonathan Dyer

LendingTree Study Shows How Much a "Fair" Credit Score Can Cost

As confusing as credit scores can be for some people, one thing is fairly clear: a higher score means paying less for financing. But how much less? A recent study by LendingTree compiled the data to find out how much those with "very good" credit save in interest compared to...

Delta Announces Major Profit-Sharing Bonuses for Employees

As the United States economy has continued to expand and executive compensation has expanded with it, income inequality has become a more high-profile topic. While that's partially because of the latest election cycle and the controversial 2017 tax bill, grassroots minimum wage hike efforts and the like have also played...

Chainalysis Suggests $2.8 Billion in Bitcoin Was Laundered Last Year

For as much mainstream success and acceptance as Bitcoin and other cryptocurrencies have enjoyed in recent years, there are still those who remain skeptical of digital currency. In addition to those who criticize crypto for not having any "real value," regulators have repeatedly pointed to the ability to "launder" funds...