Better minimum wage is good for business

Here’s some good information at Tom Paine.com (Slapping The Invisible Hand, Chuck Collins, January 29, 2007) to counter the “Chicken Littles,” as Collins rightly call them, who shout wrongly that a raise in the minimum wage will hurt the economy. These are business people who support the raise. Why would they do that? Well, as citizens they know that this seemingly common-sense cause-and-effect claim is false – that attempts to show the dire result predicted have come up negative – often quite the opposite, in fact -- and that the benefits of a more productive work force with more money to spend and more need to do it quickly – thus pumping the economy with a bottom-up multiplier effect -- far outweigh any immediate increase in labor costs.

But how about as business owners or leaders? Besides the beneficial macro effects of more money sloshing around to buy their products or services – remember the supposed Henry Ford dictum that Ford workers needed to make enough to afford a car if the industry was to grow -- they also argue the benefits of a happier work force, with its members more willing to play their part in being more productive and reducing turnover.

Many of these business leaders supporting a minimum wage increase are known for not pushing labor costs as low as they can go.

For many business owners, paying their workers well is common sense. "Trying to save money by shortchanging my employees would be like skimping on ingredients,” said Kirsten Poole, a petition signer and co-owner of Kirsten's Cafe and Dish Caterers in Silver Spring, Md. “I'd lose more than I saved because of declining quality, service, reputation and customer base. You can't build a healthy business or a healthy economy on a miserly minimum wage."

The skeptic will say, “So, nobody’s stopping them from making the decision to pay better than minimum wage, but why force it on everyone through the law?” Well, some of them, with certainly Costco as an example, must compete against companies like Walmart that are reputed to squeeze their workers as much as possible and battle unionization wherever the slightest embers start to glow. Thus, as with many laws that regulate business, there is a “level-playing-field” benefit for the most reputable businesses. That’s the loose end that’s tied when anyone can compete by racing to the worst possible treatment of workers without restriction.