Moderated by Rick Badie
Whether to raise the minimum wage remains a divisive political issue. President Barack Obama wants the federal hourly rate raised from $7.25 to $10.10. Today, a small-business proponent says a wage increase would hurt employers, while the founder of a liberal advocacy group offers an opposing view. Meanwhile, the head of a nonprofit wants the federal government to do more contract work with small businesses.
Support pro-growth policies
By Kyle Jackson
The debate over raising the minimum wage isn’t about policy. It’s about politics and playing to people’s emotions rather than good economic sense.
The argument in favor of raising the minimum wage comes down to this: You can’t raise a family on $7.25 an hour. If you were a politician, it would be awfully tempting to try to win votes by telling voters you think they deserve a 39-percent pay raise.
The truth, though, is that raising the federal minimum wage to $10.10 an hour wouldn’t really help people it’s supposed to help — young people entering the work force and those with little education, skills or experience.
“As a policy tool, it doesn’t reach the right people,” said Robert Nielsen, a University of Georgia economist who co-wrote a study on the minimum wage a couple of years ago. Nielsen and a colleague from San Diego State University found that most of those earning minimum wage aren’t family breadwinners, and most aren’t poor.
They reported that about nine out of 10 workers who benefited from the last increase in the federal minimum wage lived in households with incomes that were at least two times over the poverty line.
Moreover, the nonpartisan Congressional Budget Office recently said that raising the federal minimum wage to $10.10 an hour would result in the loss of 500,000 jobs as employers cut positions to offset the higher wages.
The National Federation of Independent Business, the nation’s oldest and largest small-business association, has about 350,000 dues-paying members nationwide, including 7,500 in Georgia. Our positions are based solely on input from our members. Year after year, they’ve told us that raising the minimum-wage would hurt their businesses.
That’s in sharp contrast to the so-called Small Business Majority which, according to The New York Times, doesn’t have any small-business members and, according to the Washington Examiner, routinely takes positions that support the Obama administration but stand at odds with the mainstream business community, such as raising the minimum wage and higher taxes.
If you were to talk to small-business owners, they’d tell you they offer the best wages and benefits to attract the best employees they can afford. They’d tell you that an increase in the minimum wage would make it harder for them not only to grow, but to run their businesses.
And they’d tell you that politicians who can’t balance a budget have no right to tell anyone how to run a small business. President John F. Kennedy once said, “A rising tide lifts all boats.” If President Barack Obama and Congress want to help working Americans, they should support pro-growth policies to help entrepreneurs and job creators, the engine of our economy.
Kyle Jackson is Georgia state director of the National Federation of Independent Business.
Businesses support minimum wage hike
By John Arensmeyer
Small business owners are bottom-line oriented. They make decisions based on what makes financial sense. Doing right by their employees is just as important as the almighty dollar in the decision-making process. Small employers know a positive work environment means increased productivity, which improves their bottom line.
This explains why 57 percent of entrepreneurs support increasing the federal minimum wage to $10.10, according to a recent Small Business Majority poll conducted by Greenberg Quinlan Rosner Research. A higher minimum wage is good for consumer demand, which can give a boost to the economy and business profit margins.
Darien Southerland, president of BG Ad Group, a marketing and advertising agency in Atlanta, has raised wages for his office assistants and event workers to at least $10.10 an hour, the amount being proposed in a federal bill making its way through Congress.
“When you run a business and work with a small group of people, those people become like family, and it’s important to take care of them,” he said. “I’ve found that when you pay your workers a fair wage, it shows them you respect them, and they’ll work harder for you in return.”
The majority of small business owners believe it’s wrong that people working full-time earn $15,080 a year at the minimum wage, significantly lower than in the 1960s when adjusted for inflation.
More than half of small business owners polled agree increasing the minimum wage would make low-income consumers spend money. An analysis conducted by the Economic Policy Institute found that raising the minimum wage to $10.10 an hour would boost the economy by $22 billion during the initial phase-in period, creating 85,000 jobs.
In the Peach State, a raise would directly impact more than 570,000 workers and benefit a total of more than 900,000 Georgians in the workforce. It also would help lift out of poverty the 400,000-plus working adults with a family income of less than $20,000.
Raising the minimum wage also finds broad support in the retail and restaurant industries: Six in 10 small business owners in those industries support increasing the minimum wage to $10.10. This support is in stark contrast to those who say retailers and restaurateurs, in particular, would go under if the minimum wage was increased.
“We start our employees off at the minimum wage, though we like to bump up their wages a little bit quickly thereafter,” said Zach Davis, owner of Penny Ice Creamery and Restaurant Assembly in Santa Cruz, Calif. “I do not want my business to be a place that pays strictly minimum wage, because I’m a firm believer that the current federal minimum wage just isn’t practical.”
Small business owners are the nation’s biggest job creators. Politicians should listen to what they’re saying and act accordingly.
John Arensmeyer is founder and CEO of the Small Business Majority, an advocacy group.
Public contracts create new jobs
By Roger A. Campos
Reducing the deficit is necessary for the nation’s long-term fiscal health, but the main focus of Congress and the president should be creating jobs. Federal Reserve Chairman Janet Yellen rates jobs and unemployment as the nation’s top priority.
In 2012, 36 percent of business owners were women with 7.8 million firms. Veterans comprised 9.1 percent. Nearly 15 percent of all U.S. businesses were non-white, and 10 percent were Hispanic. The most recent statistics collected in 2007 show there are almost 6 million minority-owned firms: 2.3 million Hispanic, 1.9 million African-American, 1.6 million Asian-American, and 300,000 Native American/Pacific Islander. They contribute more than $1 trillion to the U.S. economy.
The major obstacle to creating jobs is insufficient demand for goods and services. To spur economic growth, policymakers should focus on how to build demand for American-made products, particularly for small, minority and women-owned businesses that create two-thirds of new jobs.
The economic fabric of our country is fragile. Interest rates are moving up with little evidence that banks will lend to small businesses. While capital is the lifeblood of businesses, the lifesaving medicine is selling products. Without increased demand and sales, businesses will struggle, and job growth won’t pick up.
The government should focus on contracting more with small businesses. The government could save thousands of small businesses and create jobs by increasing the prime small business contracting goals from 23 to 25 percent. Our federal government buys almost $500 billion annually from businesses, with about 80 percent going to large businesses. With the stroke of a pen, Congress and the president could increase the small business share by just 2 percentage points and add $10 billion to the economy.
Our government should reprioritize contracting planning to expand business with small, minority, veteran and women-owned businesses with a new initiative called Small Business First.
The House Committee on Small Business has introduced legislation to increase small-business prime-contracting goals from 23 to 25 percent and subcontracting goals from 35.9 percent to 40 percent. The bill promotes accurate reporting and transparency by requiring that only prime contract awards count toward the prime contract goal.
Contact your elected officials and urge them to support this legislation.
Roger A. Campos is president and CEO of the Minority Business RoundTable, a nonprofit organization.