By Darryl Wilkinson
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Debate has renewed on minimum wages, just how serious is curious. Political points go to the elected official who trumpets better wages for the common man, knowing the odds are against significant immediate change.
One idea attractive to small business suggests raising minimum wage for big business, not small business. It seems strange for a national, publicly traded business to pay the same minimum wage to thousands of employees as the mom-n-pop business, especially if quarterly corporate reports are measured in the millions (if not more). So, the idea of different rates of minimum wage appropriate to business size seems righteous. It’s a good idea, but…
Where’s the line? What’s the boundary defining a small business from a big business? Should definitions be based on taxable profits, or gross revenue, or employee counts, or whether the business answers to entrepreneurs or to stockholders? Once adjusted, can the minimum wages really be tied to median wage growth?
Who does enforcement — will this involve a whole new level of bureaucracy? How do different rates of minimum wage apply to workers employed at two or more jobs, or seasonal workers? Does the idea of a tiered minimum wage create more administrative problems than it solves?
Bumping the minimum wage up to $15 an hour may help resolve poverty line issues in some states, but is it fair when looking at all markets across the country? Research confirms pay raises help workers with jobs but the number of jobs available will decline; part-time workers lose hours of work while inexperienced or entry level workers find it harder to find work at all.
And then, there’s politics. Twenty-five states have passed “preemption” laws, preventing minimum wage increases above the state minimum in cities and counties. Raising the minimum wage for big business, not small business, sounds like a great idea …but it’s more complicated than a catchy slogan.
Most agree minimum wages should increase. Researchers say the federal minimum wage has not been raised since it went to $7.25 an hour in 2009 — and inflation has reduced its value by nearly one-third from its highest real value, in 1968. Missouri is on its way stepping to $12/hour — and any mandated increase is bad timing with COVID already pounding small business. Increasing and changing minimum wages in phases over years offers the best chance to improve economic equality.
Raise the minimum wage for big business, not small business, sounds good. But there’s devil in the details.