On Friday, lawmakers in Honolulu advanced a bill, which increases minimum wage from $7.25 to $10.10 an hour by January 2018. It is projected to have a gradual increase from year to year until 2018. Also, Governor Abercrombie supports this bill.
It seems that even President Obama is pushing Congress for a minimum wage increase nationwide. Republicans are trying to push for something a bit different; to get rid of minimum wage entirely. Something like minimum wage affects the growth of many small businesses. If minimum wage were to increase drastically, it will affect the success of small businesses.
As America is the “land of opportunity”, where many immigrate to the states with the goal of building their own business, the American government makes it difficult to do so. Yes, there are many success stories out there and there are many mom and pop businesses shutting down as well due to the economy. How will increasing minimum wage affect these small businesses?
An example here in Hawaii is a Christian bookstore on Halekauwila, Logos Bookstore, who is celebrating its 31 years of being in business. The bookstore has not been shy in its e-newsletters sharing about the longevity of the business. Recently, Logos considered closing its doors or renewing their lease. Sales have not been so grand and it’s taking a toll on business. After deciding to renew their lease, Logos still struggles to increase sales. With minimum wage increasing, how will this affect a business like this? Will this result in the small business cutting down its staff? Or will it result in increased prices?
Small businesses have choices to make with their staffing. While some will decide to downsize or relocate to a cheaper location, others might increase their prices. In the end, it is the consumer is who really suffers. Consumers will likely need to dish out more money to keep these small businesses afloat. Or will consumers decide to shop big business to save an extra buck?