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What Is Going On With Minimum Wage?
by Jessica Buchholz, Events Coordinator | February 11, 2021
| Legislation under consideration is generating A LOT of questions |
| Whenever legislation that impacts businesses is considered on the federal or state level, businesses have questions. Has the legislation passed? When will it be implemented? How much will this cost me? How will this impact my customers? Minimum wage increases can impact businesses in a number of different ways, but here are the most common: Wage increases will increase business costs.Improved wages can increase consumer spending.Increases in wages can increase costs of goods ( as wage increases are passed along to consumers). From a community standpoint, minimum wage changes can have different types of impacts: Increases in disposable income can generate new sales tax income (a small percentage of that income helps pay for city/county services, with a larger portion remitted to the state).Product or service costs for local governments can increase.Some businesses may seek to shed employees or replace them with technology as costs rise, impacting unemployment.Those with more disposable income may seek changes in their living environment or spend on other types of deferred categories.Costs associated with some income based social services may decrease.Inflationary pressures may occur. Some people are probably reading those lists and are freaking out a bit. Others are probably thinking “that’s not so bad”. Remember, nothing has passed yet, and even if legislation passes that raises the minimum wage, it won’t be “all at once”. CLICK HERE for a basic construct of how a phased increase in minimum wage may look. Small businesses that depend on lower labor costs to meet local price expectations could see some struggles until the consuming public acclimates to new pricing schedules. Proposed changes in “tipped wages” for restaurants would constitute a more substantial change for that industry. However, we have seen minimum wage increases before, and given enough time, most businesses can adapt. Remember, you have an opportunity to reach out to federal legislators to ask questions and do additional research prior to any changes made. CLICK HERE for legislative contact information. There are pros and cons with any type of legislative action. Please take some time to educate yourself about potential changes. This article stems from a discussion point at the most recent Merchant to Merchant meeting. If you have questions that concern your business, please contact Emporia Main Street. We may not have all the answers, but we typically can find helpful information. |