In September of 2014, the South Carolina Small Business Chamber of Commerce (SCSBCC) announced its support for phasing in an increase in the federal minimum wage to $10.10 per hour. South Carolina has no minimum wage so most workers are covered by the federal minimum wage, which has been at $7.25 since 2009. In South Carolina about 300,000 employees have hourly wages below $10.10.
The SCSBCC believes that increasing the minimum wage will boost consumer demand, which is how Main Street businesses grow. While Wall Street has boomed in the recovery from the Great Recession, local economies have not. Per capital income in the state has been declining. The state has the ninth highest poverty level and 60% of those below the federal poverty level are employed.
Increasing the minimum wage will put more money in the hands of people who will spend it in their communities and increase the GDP for the state by $450 million (net effect).
Research on hard data from states that have increased the minimum wage refutes the warning that such an effort will “kill jobs”. On the contrary, in the 13 states that did increase the minimum wage job growth for minimum wage workers was higher than non-minimum wage workers.
Recent polls find that both small businesses and the public understand that increasing the minimum wage increases consumer demand. A 2014 national, scientific poll conducted by Lake Research Partners for the American Sustainable Business Council found that 61% of small business owners support increasing the federal minimum wage to $10.10. A November, 2014, poll by Hart Research Associates found that in 11 U.S. Senate battleground states found that 62% of voters also supported raising the minimum wage to $10.10 and agreed that doing so would boost the economy by “putting money in people’s pockets.” A Winthrop University poll taken in February/March 2015 found that 68% of South Carolinians think that the state should raise the minimum wage.
Only two industries are most likely to be affected by increasing the minimum wage—retail and hospitality. In retail it is primarily the large, highly profitable national chains like Walmart and Target that pay minimum wage. These giants can certainly afford to help the local economies that they serve grow by paying a higher wage.
Hospitality representatives claim that increasing the minimum wage would result in a reduction in employees and their hours. As the research cited above indicates, increasing the minimum wage has actually resulted in more minimum wage jobs. In addition, many restaurant owners have made the decision to pay higher than the minimum wage because in reduces turnover, training and costs due to inexperienced workers while increasing worker morale and loyal customers. All of this without the need to raise menu prices.
The SCSBCC also supports the South Carolina establishing its own minimum wage of $10.00 and encourages local governments to require that level of minimum wage for their contractors. In addition the SCSBCC supports the state establishing a tax credit for small businesses that are impacted.