The expected protestations came in from other business organizations as I expected from my announcement yesterday of the South Carolina Small Business Chamber’s support of at $10.10 minimum wage (see the GSA Business story below by Ashley Boncimino).
The state chamber that represents the big businesses of the state, S.C. Chamber of Commerce (no relation), claims that increasing the minimum wage would have a “negative impact on business costs and job creation”. We should expect this sentiment from the big chamber which has to protect their big dues paying members like Walmart and Target. But are we really concerned about maintaining the immense profitability of these giant retailers or are we more concerned about growing our small businesses? I’m siding with putting more money on Main Street instead of in the pocket of the Walton family.
My friend John Durst of the S.C. Restaurant and Lodging Association also opposed raising the minimum wage repeating the same old response that such a move would result in a reduction in employees and their hours in the hospitality industry.
Fortunately, there are restaurant owners who disagree about the results of raising the minimum wage. I spoke with Chris Sommers yesterday on my radio show about this very issue.
Mr. Sommers is a very successful owner of a growing chain of restaurants who by his own account runs a very tight ship. And it is because he keeps a close eye on his 465-worker stores that he knew exactly what would be the result of having a self-imposed $10.10 minimum wage.
You can hear the 12-minute interview here.
The bottom line is that if we are going to grow our local economies, we need to put more money on Main Street. Raising the minimum wage to $10.10 an hour will do just that and all small businesses will benefit….including restaurants.
September 19, 2014
S.C. Small Business Chamber backs $10.10 federal minimum wage
By Ashley Boncimino The S.C. Small Business Chamber of Commerce announced its endorsement of a $10.10 federal minimum wage, a nearly 40% increase from the current $7.25 per hour. The organization’s stance would increase the minimum wage over 2 1/2 years.
“Our state badly needs a boost in consumer demand, which is how Main Street businesses grow.” Small Business Chamber President and CEO Frank Knap Jr. said in a statement. “Per capita income has fallen by nearly 3% in the last five years. That’s the wrong direction. Wall Street might be booming, but that isn’t helping Main Street.”
Knapp said 61% of small-business owners support higher minimum wages.
S.C. Chamber of Commerce Associate Vice President of Communications Julie Scott said her organization is not in support of minimum wage increases because of the negative impact on business.
“Raising the minimum wage can have a substantially negative impact on business costs and job creation,” she said in an email. “As employers deal with these increased costs, naturally, job creation suffers.”
Knapp said increasing the minimum wage would help business by increasing the buying power of the estimated 300,000 people who make less than $10.10 per hour in the state. That estimate is from the Economic Policy Institute.
It’s estimated the impact on South Carolina will be $711 million, or a $450 million increase in gross domestic product for the state, according to a news release.
The Small Business Chamber of Commerce said the estimated $711 million impact on the state includes the additional 150,000 employees expected to receive increases as a result of adjusted wage structures.
The S.C. Restaurant and Lodging Association said a higher wage could force firms to reduce employee hours, slow new hiring efforts and reduce the overall number of employees.
The organization said it agreed with the National Restaurant Association’s stance against increasing the minimum wage, saying 58% of restaurant operators increased menu prices and 41% reduced employee hours following the 2007 minimum wage increase.
“Additionally, the SCRLA is concerned because many young people across the country look to the hospitality industry for their first jobs, said S.C. Restaurant and Lodging Association President and CEO John Durst in a statement. “A mandatory wage increase could also further restrict opportunities for young and less skilled individuals.”
The S.C. Small Business Chamber of Commerce said it would also support S.C. legislators setting a state minimum wage that was higher than the federal minimum wage.
Knapp said that while many large businesses would not support a higher federal minimum wage, many small businesses already pay their workers higher than the mandated minimum in order to reduce employee turnover and remain competitive.
Knapp said organizations that pay their employees higher than the federal minimum wage tend to have happier employees and better businesses. Knapp cited In-N-Out Burger on the West Coast and Costco Wholesale Corp., the CEO and president of which has reportedly come out in support of a $10.10 federal minimum wage. Knapp also mentioned the city of Seattle, which passed an ordinance that would raise the minimum wage to $15 over a period of seven years.
“How can Costco get away with it and they’re doing pretty well, but Target can’t?” said Knapp. “This is about growing our local economy and putting money in the hands of people who will spend it on Main Street … We’re talking about the business side of this.”