SAFE FOOD FOR THOUGHT-
Minimum Wage Increase: Which Side Are You On?
How the proposed minimum wage increase will help or hinder your business.
Will Raising the Minimum Wage Really Affect Small Businesses?
When President Barack Obama declared the minimum wage for federal workers would be raised to $10.10, small business owners began looking at the prospect of a nationwide increase in the minimum wage and how it would affect their business model. The debate has been heating up as the employment climate continues to evolve from a salary/full-time environment to a hourly/part-time environment.
Support for a Minimum Wage Increase
There is a large minority of small business owners who believe an increase in the minimum wage will not affect the way they run their businesses and could actually be benefitial. Most of these owners point to the increased productivity that comes from content employees as one of the real benefits. They also believe job applications will start coming in from more skilled and reliable individuals who will be satisfied that the increased minimum wage makes certain jobs more attractive, especially in the food service industry.
Opponents of a Minimum Wage Increase
Many small business owners claim they are still feeling the effects of a deep recession. These owners have already experienced significant downsizing to their staffs and their own salaries. After running on very thin margins for several years, they feel they will have no choice but to reduce staff in order to absorb the wage increase. It seems many owners prefer to take this approach as opposed to raising prices and alienating customers.
Effects on Food Service Industry
The food service industry will surely feel the effects of any increase in the minimum wage as most of the industry’s workers are paid hourly. One way the industry could benefit from the increase would be to require value added credentials from prospective employees. For instance, a restaurant in Minnesota might require all employees to receive food safety certification MN as a condition of employment. By requiring a food safety certification MN, the restaurant owners will be getting better prepared employees which translates to more efficiency in the workplace.
Another big issue the food service industry will face when considering the hike in minimum wage: tips. Should tips be for servers be considered in the wage formula? The minimum wage for servers has not changed in over 20 years, still residing at as low as $2.13 per hour. The proposed increase in minimum wage for servers is to bring their hourly rate up to 70% of minimum wage as opposed to now where the minimum wage for servers is 29% of the federal minimum wage (huffingtonpost.com). There are many questions to consider; will this hike in hourly wage for servers ensure them living above the poverty line? Will the increase effect the willingness of patrons to tip generously? Will the increase cause restaurants to increase menu prices? A bit of food for thought…
Since a majority of Americans support a possible minimum wage increase, it would seem to be eminent once the lawmakers work through the issues. Restaurants and other small businesses will all need to access the possible effect on their business and make tough decisions. As the workforce continues to shrink, those who work need a working wage in order to survive the current living environment in America.