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Tracking the Pros and Cons of Increasing the Minimum Wage

The social and cultural drumbeat for higher minimum wages is picking up volume, but CEOs and business owners may want to listen to their own drummers on this issue.

From coast to coast and at every level of government and enterprise, in the midst of a slow-growth economy, pressures understandably are rising for higher minimum wages in the hopes they would boost household finances and, ultimately, consumer spending. But will they?

President Obama, as well as other federal and state politicians, are advocating for the federal government to boost its long-standing $7.25 an hour minimum to $10 an hour or more.

“Pressures are rising for higher minimum wages in the hopes they would boost household finances and consumer spending. But will they?”

A survey by an activist group supporting that effort, “Business for a Fair Minimum Wage,” reports reports that “small business owners with employees are strongly in favor of raising the federal minimum wage to $10.10 and adjusting it to keep up with the cost of living in future years.”

Massachusetts was one of the first states to make a move, increasing its minimum wage to $11 an hour, and is currently the state with the highest minimum wage. Seattle will outdo that when it steps up to a $15-an-hour minimum over the next few years.

News media are providing a positive spin by making shining examples of companies that pay high wages to their workers, ranging from Costco to small restaurant chains such as Boloco and Shake Shack. At the same time, progressives continue to vilify major employers, including McDonald’s and Walmart whose business models of providing inexpensive goods to the American masses are dependent on keeping wages low.

About dale buss

dale buss
Dale Buss is a long-time contributor to Chief Executive, Forbes, The Wall Street Journal and other top-flight business publications. He lives in Michigan.