Recently the idea of increasing the minimum wage has come back to the attention of politicians and social manipulators in our media. In many respects, proponents of this have good intentions. The theory is understandable that raising the minimum wage will help low wage employees obtain a better lifestyle, take pressure off social service agencies, create more dedicated employees, and boost our economy. Having been in business for myself since 1975, I have seen first-hand that in the real world, all of those beliefs are dead wrong.
I don’t have any minimum wage employees in my companies and never have. However, there are many companies that rely on the entry level and youth employees that are most impacted by the minimum wage. A 24% increase in the minimum wage, as proposed during the State of the Union address recently, would devastate businesses like restaurants and retail stores where these wages are in use. There is no room in the profit margins in those establishments to absorb the added cost of an increase in the minimum wage. Their only logical moves will be to either reduce the number of employees, raise prices to make up the difference, or a combination of other business changes, none of which are good for either the consumer or the economy. There are many other costs associated with increased wages, such as employer match within Social Security and Medicare, plus SUTA, FUTA, and other mandated employment costs.
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Jeff Annis is a lifelong entrepreneur from Augusta, Ga. where he built Advanced Services, Inc. from a startup to one of the top 125 pest control companies in the USA, out of 19000 in 26 years, one customer at a time.
In another role, Jeff is a partner at Work Life Advisors, LLC, a company that trains and coaches entrepreneurs how to have a great business and a great personal life at the same time.