Across the United States, many states have raised their minimum wage to above ten dollars per hour. Many states have passed ballot initiatives that will increase their minimum wages incrementally over a period of a few years, creeping above ten dollars and slowly towards fifteen dollars per hour. While many people believe that these increases will benefit the American worker, they are detrimental to many small and medium-sized businesses that do not have the ability to pay the increased wages to their employees and are faced with closing their doors, laying off employees, cutting back on hours, or some combination of the above. Often, employers are not able to provide as many overtime hours either. Many small businesses are faced with a stark reality: if they cannot pay their employees, they are often forced to close their doors. Other businesses are forced to raise the prices of the goods and/or services that they sell, which often drives away previously happy customers.

While many voters may think that voting to increase the minimum wage in their state is a good idea, it has consequences. Many voters do not realize the extra expense that small and medium sized businesses are required to deal with to make ends meet. Businesses are typically seeking to make a profit, and raising the minimum wage every year until it reaches fifteen dollars can be detrimental to their efforts, especially the smaller the business is. Undoubtedly, any people benefit from the increases. Many workers benefit from the increases in income that it provides them, over time enabling them to make a better livelihood for themselves and family members. By making the minimum wage so high, it can drive down the value of a high paying job down the road and the employee might think that they deserve more money than they are currently being paid.

In the end, minimum wage increases can benefit some people but it seems that they prove detrimental to far more people than they benefit. The effect of raising the minimum wage often requires businesses to restrict their business hours, cut overtime hours, raise prices of goods and/or services, and in some cases, close their doors entirely. Voters and politicians should think twice before approving exorbitant minimum wage increases.

Michael