The minimum wage fight is in full swing around the U.S.
Most recently, Maine, Colorado, Arizona and Washington voters approved minimum wage increases in November that will bring their states’ minimum wages to $12 or higher by 2020. But they are far from the first states to take action on this controversial issue.
States and and cities across the country have passed minimum wage laws for several years now. Right now, 29 states and Washington D.C. have minimum wages higher than the federal level of $7.25, according to the National Conference of State Legislators. Five states have not adopted state minimum wages, which means they rely on the federal level, the source noted. Additionally, many cities – including San Francisco, Seattle, New York City and Chicago – have passed minimum wages higher than their state’s level.
Proponents of minimum wage increases say raises will benefit workers, and businesses will see a bump in sales as people begin to earn more money. A national “Fight for $15” movement – which calls for a federal minimum wage of $15 an hour – coordinated protests in 340 cities across the country Nov. 29 to fight against low wages, according to The Guardian. But not everyone is sold on the idea of a higher minimum wage.
Many business advocates decry efforts to raise the minimum wage because they say small businesses will suffer from the increased cost of labor. Some opposed to minimum wage increases point out that employers must take on more than higher wages when the minimum wage is increased. Business owners also have to pay a higher share of payroll taxes and 401k match plans in some instances, Forbes reported.
How can businesses adapt?
For business owners who operate in a city or state where the minimum wage is increasing, they need to carefully consider how they are going to handle the raise. One of the most common solutions is for entrepreneurs to cut jobs or reduce hours for part-time employees. Business owners can also consider raising their prices to cover the increase in expenses. Lastly, they can examine their budgets to see if they can cut back in other areas to compensate for the increase in labor costs.
Small business financing from an alternative lender is an easy solution for business owners who need more time to figure out how to deal with the minimum wage. Small business owners don’t need to worry about having a perfect credit score, and they can receive the money they need to run their businesses in as little as one day. Having more cash on hand will alleviate some of the pressure of adjusting to the wage hike until entrepreneurs can come up with a long-term plan.