Fred Floss Case Analysis

One of the biggest negative effects of raising the minimum wage is that it would severely hurt small businesses. If the minimum wage were to be raised it would force the owners to pay their employees more money that they might not have. In order to pay the employees the newly raised minimum wage they are gonna have to raise the prices which will lead to the loss of consumers, and might eventually lead to the store going out of business. According to a Gallup poll done in 2013, 60 percent of small-business owners said that raising minimum wage will “hurt small business owners. James Richardson, MBA, Vice President of the fast food chain White Castle, said that the company would be forced to close

Several examples of data and statistics from studies elucidate the harmful effects on small businesses and in addition the compelling of companies to close as a result of the increase of minimum wage. According to a Gallup poll that took place in 2013, 60% of small business owners agreed that an increase in minimum wage would be harmful to their small businesses (Should the Federal). Small businesses do not have the money supply that chain corporations do. Naturally, if they had to pay their employees more, it would be harmful to them. Several Walmart stores have closed and Walmart stores that were yet to open have closed as a result of an increase in the minimum wage (Should the Federal). An increase in the minimum wage must even have harmful effects on larger businesses. They obviously employ several more people than a small business, so they have to pay each worker more resulting in a net loss of a lot of money from the chain. Additionally, in several work places, if the minimum wage were increased, the wages of those who hold higher positions would have to be increased. For example, if the amount of money that the minimum wage dishwasher or table busser in a restaurant increased, then the chef and manager would need to be paid accordingly. If the minimum wage were to increase, it would be detrimental to both small and large businesses.

The controversy over minimum wage has been ongoing. However, as explained in a Time article by Chris Lu on the subject, now is the prime time to raise the federal minimum wage. “Three out of four Americans support an increase; the economy is healthy; and many employers are already raising wages.” It’s reasonable to be worried about the consequences that raising the minimum wage might have in a time of crisis or unrest, but this quote mentions a healthy economy that would be able to handle the shifts in wages if things went south temporarily. Another argument made by opposers of raising the minimum is that businesses will be unable to survive. On the contrary, a good business will find it beneficial. “‘It’s a simple, but critical, concept: take care of your people and they will take care of your customers.’ For &pizza, higher wages reduce employee turnover, increase productivity and improve customer service.” Rather than hurting the economy, raising the minimum wage will help workers, business owners and the economy itself. A higher wage for all is

The federal minimum wage law was signed in 1938 by President Franklin Roosevelt in order to keep people out of poverty and increase consumer purchasing power. This has done the opposite by hurting businesses and reducing employment, while minimum wages go up, so will the costs of living. Most of the people working for minimum wage are 16 between 24 years old, 37% of workers are going to school working part time. Enrollment tuition has increased over the years, and raising the minimum wage could mean further increasing expenses. But, for people who aren 't pursuing an education and begin working right out of school, the federal minimum wage $7.25 looks like it can be hard to live on. Raising the minimum wage would most likely increase with the cost of living, making cost of living or tuition even more expensive, making it harder to pay for groceries or bills. Just because someone starts out at a minimum wage job, doesn 't mean they can 't progress through the company and earn a better wage over the years. Minimum wages are more for entry level paying jobs that don 't require any certain set of skills to be able to do what they ask. Maintaining the current federal minimum wage of $7.25 will help stop rise of inflation.

Increasing the minimum wage causes middle class Americans have less money in their pockets to spend. Representatives of both businesses and charities have almost unanimously stated that they will be forced to reduce their hours and staff size to conform to the wage increase (Englander). The risk of getting laid off or getting your hours cut because of a wage increase is ludicrous, considering said increase is meant to benefit those same people. San Francisco has recently increased their minimum wage to $15 an hour, and is starting to struggle to support it. The number of households in the area earning less than $25,000 a year is steadily growing,

The United States economy is still soft and prone to falling apart, and there is a debate that is on going as to whether the minimum wage should be increased or decreased. The minimum wage is a well known price floor, and that is what we need for our economy right now . I personally believe that we should not increase the minimum wage, but decrease it instead. I would rather have the minimum wage lowered than increased because that will only lead to negative side effects. For example, if the minimum wage is increased then the government will need to mint more money and the effect of minting more money is inflation. This will cause the American dollar to go down and worsen the economy even more. Another thought is that what the United States needs now are jobs. If the minimum wage is increased then existing jobs will want their workers to have more experience and for those people that are in dire need to a job will have a lower chance of getting the job because they

According to Jerome Fin minimum wage even at the federal level costs jobs ( Rotson 1). If a recession comes, higher wages will mean more layoffs (Alper 1) Although, this may not happen are you willing to risk it all? If a continuous amount jobs are lost not only will the lower class be affected ,but so will the middle class and upper class. “I feel every minimum wage, even at the federal level costs jobs”(Roston 1). Senate Minority Leader Mitch McConnell says “ The minimum wage is largely an entry - level wage and raising it to ten dollars and ten cents an hour would lead to destroying jobs for young people”(Raasch 16). After, Seattle raised their minimum wage to fifteen dollars an hour major problems started occurring. Adam Ozimek says “First wave of minimum wage increases appears to have lead to the loss of over one thousand one hundred food service jobs in Seattle's” (Puzder

There is a lot of controversy on this topic because people assume that it would be at least adjusted to inflation. John Komlos, a professor emeritus of economics and of economic history at the University of Munich said that in 1968 when the minimum wage peaked adjusted to inflation it would be $10.90 (Komlos). One might wonder why the US is still at a minimum wage of $7.25. Aaron Pacitti who is a Professor of Economics at Siena College claims that even though companies like Walmart and Target announced they would increase wages for their lowest paid employees to $9 per hour and McDonald's will start paying its workers $1 more per hour than the local minimum wage the raise of the minimum wage to $15 would directly affect 44.9 employees (Pacitti). This is because it doesn’t just affect the people working at the lowest it affects everyone making $7.25-$15 and hour. If a higher skilled worker is getting payed $15 an hour instead of $7.25 when the minimum wage is change they would want a change in their salary as well because they would feel like they are doing better work for the same amount. If this keeps going up the chain then there is a serious problem on how the money is distributed in a company. Even though some companies will accept that fact that some people on the top of the ladder won’t get a raise other companies will find another way to find the funds somewhere

One reason is the ordinary standard of living has risen a lot compared to the 30s. So much so that it has almost eclipsed the standard of the past. Back then stores sold products for nickels and dimes now nickels and dimes are now chump change. Instead it has been replaced with items costing $5 or more. Even dollar stores where most things are supposed to be a dollar are turning into $5 or less stores. It’s only going to get worse companies keep trying to squeeze too much out of people while still trying to make their prices sensible. If the minimum wage is raised however companies might take advantage of this and think this is their chance to raise prices. Half of isn’t because they want to squeeze profit out their customers the other half is the business itself trying to stay afloat in this competitive world. Even small business and people starting a business for the first time may have trouble have making a foothold they would have to have only a few employees and hope they can handle the extra work or risk spending more on employees alone. Current business big or small would have to start adapting to the new minimum wage and with this comes judgement day. Which business will sink or swim with the new budget they would have to creative thus risking many employees being laid off. With the fear of being laid off many employees would be searching for other jobs

(http://money.cnn.com/2009/01/09/news/economy/jobs_december/) Today, the minimum wage is $9.00 per hour but on January 1, 2016; the wage is going to increase $11 per hour. Some people believe that the solution to this problem is to automatically raise the minimum wage, however doing so would have a profound impact in a negative light on the United States’, businesses, and the

In a previously mentioned 2007 article from James Sherk, American small businesses would have to hire fewer workers with an increased minimum wage. What exactly does this mean? This means that the business' ability to expand by hiring more workers at minimum wage will be greatly reduced. According to an article from the Guarding in April 2015 from Ucilia Wang, small businesses employ nearly half of the private sector workforce in the United States. Jane Mcquin owner of a small business in New York said about an increased minimum wage "At this point as a startup it would put me out of business." That’s not the only small business owner to fear an increased minimum wage, Melissa Otto, owner of a dog care business in Santa Monica California said "We employ up to six people at any given time and increasing the minimum wage would ruin us. We provide a service – dog walking – and are already at the max of what clients will pay. There is no room for an increase." The same article also found out that the increased minimum wage forced some small businesses to increases prices by as much as 20% of what they were with the previous minimum wage. Theses increased prices can lead to customers not wanting to return to restaurants or businesses because of the high prices for the same service and the same product as before, only difference is the

There are two sides to the minimum wage issue. Many small business are already struggling to make ends meet before the minimum wage was increased. The minimum wage being increased can cause goods for store to go up. Small business that are already barely making it, are going to need to pay workers close to $8,200 more a year, says NPR. Promotion 206 would slowly increase the minimum wage to 12. 00 dollars by 2020. For business that allows employees to be tipped are allowed to pay the employee up to 3. 00 below the minimum wage ,but as long as the tips that are earned are distributed to the employee would bring that rate at least up to the minimum wage. (ballotpedia) The rise and fall in minimum wage can help and hurt the economy both ways and how that works is very interesting. The big idea of raising minimum wage is to protect the worker at all cost and assume that the owner of the business is doing just fine. America is built on small business and this can damage the economy servilely.

As for small businesses being harmed by an increase in minimum wage, Batra proves that a rise in minimum wage, as long as it is not faster than the rise in prices, will not adversely affect the businesses’ profits. He says that a business’s profit equals the revenue, less wage costs and all other costs. Batra offers an example with a popular fast-food franchise:

Small business owners in the U.S are very controversial about raising the minimum wage. Even though, most of the small business owners said they do not employ minimum wage workers, half of respondents said the federal minimum wage should be raised while the other half disagrees (Janofsky, A., Josephs, L. (2015). Many cities in The U.S have voted to increase the minimum wage. According to research, many small business owners said they planned to raise wages this year (Janofsky, A., Josephs, L. (2015). Business owners who employed workers making minim wage said they would offer a $1 raise within one year. Overall, about 15% of small business owners said more than half of their workers earned the minimum wage.

Interestingly enough, wages have remained high while unemployment rises. This model is also applicable to the current time period. Businesses can simply not afford to meet the minimum wage law while America remains in a trade deficit. Dissolving the minimum wage law will thus result in the ability of business to remain afloat and with time be able to compete with top exporting countries that are not limited by a minimum wage. All of this means that America will once again be able to complete globally. Additionally, the minimum wage laws affect small businesses in a negative way. The National Small Business Association and National Federation of Independent Business continually push back against minimum wage being raised. They have maintained that a high minimum wage will result in small businesses having to cut back hours or cut employees entirely, stifling both efficiency and potential growth (Harrison). Removing the law will create an environment for small businesses to flourish and be able to hire more workers. Although opposing sides argue that minimum wage ensures that people have money to spend (Harrison), they are forgetting a critical point: should minimum wage stay intact, and perhaps even be raised, unemployment will rise, which means fewer people will be able to spend money at all because, after all, people need a job to have money. Furthermore, abolishing minimum wage will result in businesses becoming