January 5th 2017

How Will “Fight for $15” Affect Your Small Business?

State laws regulate minimum wage. For example, in California, the minimum wage is $10 an hour. In April 2016, California governor Jerry Brown signed legislation that will raise the state’s minimum wage to $15 an hour by 2022. In state’s like North Carolina, the minimum wage requirement is set at $7.25 an hour. In March 2016, North Carolina passed a bill that abolished the state’s municipalities rights to set the minimum wage in their jurisdictions. Before the bill passed, local governments were able to set their own wages. Not anymore. 

For North Carolinian Matthew Roberts, a man who has had multiple minimum wage jobs, the state’s decision to make minimum wage a state issue and not a county issue is disheartening. “It doesn’t work out,” Roberts said in an interview with CBS North Carolina news. “You really can’t do it. No way that you can take care of your family off eight dollars an hour. It’s in no way possible. That’s another sign to show that the state of North Carolina doesn’t care about certain individuals, the working class people.”

 

Pay Matters: Don’t Stiff the Staff

If you’re about to start a small business, having a projected five-year budget will serve your business well even in its first six months. Drafting a budget will help you to visualize how much money you currently have, how much you will need to spend and the amount of profit you need to make to meet your business milestones. Here are a few “items” you need to budget for:

 

• Cost of operations
• Cost of product/materials
• Cost of labor
• Cost of office, shop or structure

 

Eight out 10 small businesses close their doors after 18 months. Why do so many small businesses fizzle out before making their second year of business? They fail because they did not take the time to understand the market, this includes understanding employee needs and wants.

 

November 29th marked the 4th annual “Fight for $15” protest where blue collar workers take to the streets and march for minimum wage hikes. According to the Huffington Post, the Fight for $15 campaign isn’t only about getting a wage hike, it’s also about getting union representation for the fast-food industry. The Service Employees International Union has donated millions of dollars to the effort in the hopes of unionizing fast-food employees en bloc. By unionizing fast-food workers as a whole, the Service Employees International Union hopes to light a fire under fast-food chain giants like McDonald’s and Burger King, in order to get the industry to start increasing workers’ wages.

 

Take a look at the minimum wage requirement set by your state. If the wage increased by even just $2, would you be able to meet the requirement and pay your employees?

 

Why You Should Pay Your Employees More

States (like California and New York) have already signed legislation to increase the minimum wage by as much as $5, with other states following suit. By paying a fair wage, you will have a better time recruiting and retaining hardworking employees. According to a 2015 Jobvite Job Seeker Nation survey, 61 percent of respondents said they look for and take new jobs based on the amount it pays. If your business pays only the minimum wage and is slow to offer promotions and wage increases, you’re going to have a high turnover rate, lowering workplace morale, decreasing revenue and reducing the return on investment, according to the Small Business Chronicle.

 

Part of doing good business is making smart business decisions. A smart business decision includes paying your staff fair wages and making sure their voices are heard. Running a business is a team effort; everyone counts.

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Justin is an active and creative entrepreneur who runs a software development company out of Los Angeles. As a long-time gadget devotee, Justin enjoys anything and everything gadget related