February 6, 2019 Associated Payroll

Minimum Wage Increase Brings Maximum Difficulty for Small Biz Owners

By Rob Basso

Every eligible American worker is, by law, entitled to fair pay. The challenge is what we as a nation deem to be fair is constantly up for debate and generally arguments ensue. Political parties, unions, employee rights organization and business owners have been wrangling over the merits of higher minimum wage for low skill jobs for as long as organized labor and wage laws have existed.

No one should ever diminish the plight of hard working men and women who fill lower paid jobs. There are countless reasons why individuals find themselves in minimum wage. These include lack of education, a recent loss from a current and higher paying position and lack of training or skills or even lack of better opportunity are just a few. For others minimum wage is simply a starting wage.

Rarely do I hear an outcry from our elected officials when it comes to the plight of the small business owners that keeps this country flush with jobs to fill. Business owners risk their own capital and expend tremendous effort and energy with only the hope that their will and determination, along with a solid business plan, will provide them with not just a job for themselves, but a long-term sustainable asset. The seemingly innocuous $1 per hour minimum wage increase to Long Island employers adds significant cost to the running of their enterprise and lowers profit as they cannot continually add cost to the consumer to pay for the increase.

Let’s take a fictional company called Bobby’s Bobbleheads, LLC. Bobby has 10 employees that each work 40 hours a week and all now received the additional $1 per hour increase that took effect 12/31/2018. With estimated employer taxes that are required to be paid solely by the employer in addition to the $1 increase, the total cost to the employer is $449.40 a week or nearly $23,388.80 per year. Bobby could always use inferior material for his bobbleheads, but then heads would certainly roll. Customers would stop buying or buy fewer products and this would force Bobby to lay off employees or even worse close his doors.

For small business owners to continue to take risks there must be a commensurate reward. In the scenario above, the business owner most likely will have to take a personal haircut of their remuneration. Many Long Islanders believe that business owners are big earners; this is simply not the case. They made a choice to be in the most control possible of their hopes and dreams. They choose to pursue the American dream.

However, the continuing pressure on small business to perform and provide jobs for the nation is now jeopardy. Rapid and unchecked government mandated minimum wage increases and other burdens create maximum difficulty on those who drive the regional and national economy. Now as we enter 2019, it is the ideal time to create an environment that will allow small business to thrive, grow and create good paying jobs, well above minimum wage.

Rob Basso, CEO and Founder, Associated Human Capital Management, Plainview, NY

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