The debate is everywhere: Obama’s remarks about minimum wage has stirred up a controversy in the business community. What effects would this have? Would it be good or bad for the small business community? Virtual accounting experts provide a quick look at some minimum wage statistics, while cutting to the heart of the issue for the small business owner.
Who’s Paying Minimum Wage?
If the words “minimum wage” immediately stir up thoughts of small businesses, you actually may be more off target than you think. The Business Insider reports that the largest number of minimum wage workers are employed by large retail and food service companies: places like Wal-Mart, McDonald’s and Starbucks. Granted, the research was destined to sniff out these companies, since it was designed to find the largest employers of minimum wage workers, but it does take some of the stigma off the small business owner.
But what about the small businesses that do, indeed pay minimum wage? Virtual accounting analysis offers the following thoughts:
- Difference of Intention: By and large, the small business owner isn’t out to keep people underpaid. Often, he is working hard himself, trying to provide food for his family, and make a difference with a business he believes in. While he may have to pay employees minimum wage to get things going, he considers them valuable team players, and truly cares for them. Ultimately, he hopes to increase pay as the business grows. In contrast, large corporations paying minimum wage see employees as statistics to be maneuvered, and they will always have minimum wage jobs, regardless of who fills them.
- Difference of Heart: Small business owners often genuinely care for their employees. Almost anyone who has worked for a small business can attest to the personal care and concern they received from their employer. They were more than a clock-punching work producer, they were valued as an individual, their joys celebrated, and their sorrows accommodated for. How much care is involved in the large corporation?
Who is Making Minimum Wage?
While emotions are often played upon in the minimum wage debate, the truth is, most minimum wage workers are not fathers and mothers providing for a family. According to the Bureau of Labor Statistics, only three percent of workers over the age of 25 receive minimum wage, compared to 21% of teenage workers. In addition, almost two-thirds of all minimum wage earners work in the service industry, with half of those working in food service, often receiving tips and commissions in addition to their wage.
The Real Virtual Accounting Analysis: Can I afford it?
Regardless of all the statistics the bottom line for most small businesses is how a raise in minimum wage will affect them. Not surprisingly, even the experts are divided on this question. A Gallup poll suggests that small business owners are almost equally divided on the sides of the issue, and representatives of the small business world, such as the Small Business majority are also divided. Ultimately, what matters to you is how it would affect your business. This cannot be determined by the Small Business Administration, Gallup, or any other organization, it is determined by your businesses current, and projected financial status. In other words, whether you choose in-house accounting or virtual accounting services, you need to have a good handle on the financial status of your business. Knowing ahead of time where you stand may help you sink or swim in the troubled waters of business in America.