A rise in the minimum wage is good for micro-businesses. It won’t raise their costs and will raise their revenues.
San Francisco, CA (PRWEB) September 27, 2013
CAMEO Applauds Governor Jerry Brown for signing AB10 (Alejo- D-Watsonville). The bill raises California's minimum wage from $8 an hour to $9 on July 1, 2014, and to $10 an hour by on Jan. 1, 2016.
"A rise in the minimum wage is good for micro-businesses," said Claudia Viek, CEO of CAMEO. "It won’t raise their costs and will raise their revenues."
A minimum wage increase will not affect hiring plans or the bottom line of micro-businesses, because they already pay way above the minimum wage. It’s common for small businesses to pay higher wages than the mandated minimums in order to attract talented and qualified workers. In California, the average wage for firms with 1-4 employees was $17.80 for the first quarter of 2013 based on a 40 hour work week. That’s more than double the state’s current minimum wage. The comparable average wage for the U.S. is $20.45, or almost triple that federal minimum wage.
Another reason micro-businesses agree with raising the minimum wage is that low income people’s disposable incomes will rise and that means more customers for the very small business owners. A recent poll by Small Business Majority found that “a 67% majority of small business owners agree the current federal minimum wage of $7.25 per hour should increase, and that it should be adjusted annually to keep pace with the cost of living. Moreover, almost four in 10 (36%) strongly agree.” The main reason that they believe in the wage increase: the increased customer demand from those with the lowest incomes will increase business, and might lead to increased employment.
CAMEO is California’s statewide Micro Enterprise association made up of over 160 organizations, agencies and individuals dedicated to furthering Micro Enterprise development in California. CAMEO members serve about 21,000 businesses with training, technical assistance and loans. These firms, which were largely start-ups, support/create about 35,000 new jobs and generate about $1.5 billion in economic activity– raising state revenues, decreasing demand for government services and putting more money into local and state economies. Federal taxes paid increased 35% over a five-year period.