(805) 965-6073
DonateMeet Our Clients
Facebook
LinkedIn
YouTube
Instagram
  • Events
    • Upcoming Events
    • Past Events
  • Programs
    • Business Training
    • Consulting
    • Loans
    • WEV LinkedIn Learning
    • QuickBooks & Financial Empowerment
    • FAQs
  • COVID-19
    • Resources & Information
    • ReStart Loans
    • Donate
  • Español
    • Quién es WEV?
    • Capacitación Empresarial
    • Préstamos Para Negocios
    • Programa LinkedIn Learning de WEV
    • QuickBooks y Empoderamiento Financiero
    • Clientes
    • Instructores
    • Comunícate
    • COVID-19
    • Préstamos de COVID-19 Reapertura
    • Recursos
  • Support WEV
    • Donate
    • Empowerment is Priceless
    • Join The League
      • Join Today
      • Spotlights
    • Sponsor
    • Volunteer
  • Clients
    • Million Dollar Club
    • Client Business Directory
    • Santa Barbara County Clients
    • Ventura County Clients
  • About
    • History
    • Board of Directors
    • Our Staff
    • Instructors
    • Advisors
    • Impact
    • Careers
    • COVID-19
  • Newsroom
  • Videos

Making Sense of the Minimum Wage Debate

mbaileyBlogNo CommentsApril 4, 2014

By Marsha Bailey, Founder & CEO

As a small business owner, employee compensation is a huge issue, especially for cash-starved start-ups. Most business owners don’t have the option of taking a salary until the business is profitable. Employees, however, are unlikely to show up without the promise of a paycheck. So what do you do, find the cheapest employee you can, or pay more and hope your investment pays off?

Henry Ford is often praised for doubling the going pay for workers (from $2.50 to $5.00 per day) so they could afford to buy his cars. But a recent story in Forbes says otherwise: Henry Ford increased wages to attract and retain reliable workers. You can imagine what would happen to Ford’s major innovation – the assembly line – if workers failed to show up or walked off the job. You can’t just skip that particular widget and move the car down the line – picture wheels falling off.  It also turned out that he significantly expanded the market for his own products.

Today, those opposed to raising the minimum wage inevitably point to the impact on Small Business, but some of the biggest opponents are not small at all – they’re traditional low-payers like McDonald’s, which pays an average hourly wage of $7.72 per hour. Contrast that with In ‘n Out. The famous West Coast burger chain offers an entry level wage of $10.50 per hour with raises of 25 – 50 cents an hour typically given within the first six months of employment. And you don’t see In ‘n Out’s business or profits suffering. On the contrary.

The reality is that wages have not kept up with productivity gains since the seventies.  A study by the Center for Economic and Policy Research says that if wages had kept up with increases in worker productivity, the minimum wage would have stood at $21.72 in 2012.

So what’s a small business owner to do? When you’re deciding how much to pay an employee, you have to think about your return on investment. How much training do you need to provide, will the employee interact directly with customers, what does a high turnover rate cost you in both time and money? Constantly having to hire and train new staff takes you away from the higher level planning, marketing and sales work you need to do to grow your business.

My own personal belief is that you get what you pay for. Paying employees fairly and providing good benefits fosters commitment and loyalty. Employees who feel underpaid and underappreciated are prone to higher rates of absenteeism and are more likely to steal from their employer.

WEV’s annual impact survey indicates that among the clients we serve who have employees, the median wage is $14.00 per hour. This is significantly higher than minimum wage and supports other research indicating that women business owners tend to pay better and provide better benefits.

What have you learned about hiring and retaining good employees?

: employee compensation, minimum wage, small business growth

Related Posts

Small Business Owners: Start the Year with Savvy and Confidence

January 3, 2020Lysa Urban

Even Little Blue Engines Need Fuel

January 30, 2014mbailey

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Get Updates from WEV

Santa Barbara County Office

Monday-Friday: 9am-5pm

333 S. Salinas Street
Santa Barbara, CA 93103
Tel: (805) 965-6073
Fax: (805) 962-9622

Parking is available on the street or in the parking lot off Lou Dillon Drive. WEV only has one space available in the front lot.

Ventura County Office

Monday-Friday: 9am-5pm
*Appointments are preferred; please call ahead before stopping by, as our Ventura staff members frequently work in other locations.

290 Maple Court, Suite 268
Ventura, CA 93003
Tel: (805) 667-8004
Fax: (805) 962-9622

WEV's office is located in the back of the 'Financial' building if facing the building from Maple Court.

  • About Us
  • Client Resources
  • Client Business Directory
  • News
  • Women’s Business Center (WBC)
  • Accessibility Statement

Privacy Policy Terms of Use Copyright © 2021 Women’s Economic Ventures. All rights reserved. Created by NDIC