Minimum Wage Increase Is Good for Business

A growing number of business owners are voicing their support for a minimum wage increase.
"People who tell you that raising the minimum wage will hurt small business are flat out full of it," said Lew Prince, co-owner of Vintage Vinyl, a music retail business in St. Louis. "Small business owners know that keeping workers is easier and cheaper than finding and training new ones."

For many business owners, paying their workers well is common sense. "Trying to save money by shortchanging my employees would be like skimping on ingredients," said Kirsten Poole, a petition signer and co-owner of Kirsten's Cafe and Dish Caterers in Silver Spring, Md. "I'd lose more than I saved because of declining quality, service, reputation and customer base. You can't build a healthy business or a healthy economy on a miserly minimum wage."

A growing body of evidence shows that successful businesses that are "built to last" don't skimp on wages. "It is a sound business decision to increase the minimum wage," said venture capitalist Adnan Durrani, president of Condor Ventures in Stamford, Conn. "I have found that without exception in the successful ventures we've backed, providing sustainable living wages yielded direct increases in productivity, job satisfaction and brand loyalty from customers, all contributing to higher returns for investors and employers."
This is why most small businesses pay far above minimum wage if they can. You get what you pay for.

Paul's feeling is that no minimum wage should be mandated in a free market. Too bad there is no such thing as a free market. Markets are manipulated and abused all the time.

With the number of jobs that are moving to other countries it would be only a matter of time before employers would begin paying far below the minimum wage.

Wait. I forgot. Many already pay below minimum wage. This is why they hire undocumented workers...

If you could trust capitalists to do the right thing, there would be no need for a minimum wage. Unfortunately the temptation for greedy business owners is to take advantage of workers.


Paul Hue said...

All of these capitalist advocates of minimum wages you cite here, Nadir, already pay higher than the minimum wage. Why do they want the government to intrude on their business and those of their competitors and suppliers to dictate wages?

What these advocates have accomplished here is present a great case for businesses paying their employees well. ... by their own choice. These guys have even effectively described how they arrive at their well-above-minimum wages: they keep increasing their wages until their employees stop quitting and until productivity and worker quality raises to some acceptable level. They did not arrive at these wages by submitting to government scrutiny and mandate.

How do these employers know that no jobs exist for which the correct optimum wage does not fall under the proposed new minimum wage? Why not let the market decide? If your capitalists are correct -- and I agree with them -- the employers foolish enough to pay below the optimal wage will suffer exactly as described here. They will either go out of business or respond with higher wages... without government meddling.

How would these employees feel about a government agency evaluating these wages of theirs -- these proudly "high" "living" wages -- and determining that they are too low? These guys support raising minimum wages... so long as the increase falls below what they have freely determined to be optimal for their own businesses. But why stop there? If governments really have the power to dictate how much money employees get in their paychecks, why not dial the minimum wage up to $15/hr? Or $30/hr? Big flat screen TVs and new cars for everybody!

How would these "compassionate capitalists feel then"? Seems to me that they're all for having the government regulate SOMEBODY ELSE, but not them.

By the way, Nadir and Tom, please finally answer my questions about what you guys pay y'all's employees, in the band (Nadir) and on the farm (Tom)? What if I could get a law passed requiring that:

1. All clubs must pay bands $1,000/bandmate for each gig?

2. All restaurants must pay $10 per organic spinach bushel?

Do you suppose, Nadir, that your club dates might dry up? Or, Tom, that your restaurants might start purchasing from commercial giants?

How about laws requiring all bands to pay their drummers $7 per practice hour? Or organic farming interns the same? Plus all the attending mandated benefits and paperwork also, of course. Please address this.

The fact that even thee freest markets in existence have some restrictions is a poor and even nonsensical point in favor of more restrictions, or keeping restrictions. We advocates of free markets want to increase the amount of freedom in markets, even if we can't achieve total freedom. You will get nowhere pleading that because many restrictions exist that we free marketeers should support any particular restriction. We think that there's too many restrictions.

Nadir said...

I pay my band at least a minimum wage. I'd like to pay them more, but clubs don't pay me more.

The market dictates the wages I am allowed to pay quite a bit, which is why I have been doing more solo shows. My labor struggles in the past have come from employees dictating wages that were higher than the market rate, so they were fired.

But this isn't an argument against a minimum wage. If I get a job that won't allow me to pay my contractors their minimum, I won't take it, or I'll play it by myself. The diversity of my product allows me that advantage.

The lack of restrictions on wages hasn't gotten me more work, and it hasn't generated a higher quality of entertainment for clubs. Those clubs that don't pay well, don't have good entertainment. Of course, some don't care. They would rather have karaoke, where people pay money to entertain themselves and each other. Americans are easily entertained...

Same probably goes for Tom. As long as Americans are satisfied with McDonald's, his revenues won't be what they should be.

Paul Hue said...

Nadir: *You* think that you pay your mucians enough; but what if some other "activist" or government rep decided otherwise? How can you be sure that *you* pay *your* employees enough/fairly, but that other employees don't? Since you and your employees are free to arrive at mutually agreeable terms, why not all employees?

Paul Hue said...

Nadir: How do you know that some of your previous bandmembers didn't quit because they felt that you didn't pay them enough?

Imagine you created a law requiring filmmakers to pay a minimum of $2,000 to score a film, but they could only afford $1,000, and you were willing to write the score for $1,000. According to your law, neither you nor the filmmaker would get what you both mutually agreed to exchange with each other. What is good about that?

If minimum wage laws work, why stop at 7$? Why not mandate 70$/hr for every worker! And "free" healthcare! And new cars every two years! And an ipod for everybody? And flat screen TVs!