By Karen E. Klein
Bloomberg BusinessWeek, August 17, 2012

Excerpt:

... Historically, efforts to raise minimum wages have drawn staunch opposition from small business advocacy groups. But as U.S. income inequality has widened and economic studies have challenged the long-held notion that minimum wage increases suppress employment, small business owners and lobbyists are turning up on both sides of the debate. ...

In contrast to her counterparts at the U.S. Chamber of Commerce, which has staunchly opposed minimum wage increases, Margot Dorfman, chief executive of the U.S. Women’s Chamber of Commerce, supports an increase. “Raising the minimum wage would increase the tax base and decrease the need for government relief,” she says. A good portion of her 500,000 members, about three-quarters of whom are female business owners, have worked hourly jobs at some point. “Oftentimes the women who are working are the ones being paid the minimum wage, and they’re single parents who need to put a roof over their head and feed their children.”

Holly Sklar, founder of Business For a Fair Minimum Wage, aims to debunk the notion that all business owners oppose minimum wage increases. “There was a portrayal of too many policies as business on one side and everybody else on the other side,” she says. ... Founded in 2006 to fight for the most recent federal minimum wage increase, in 2007, it’s backing proposed legislation that would boost the federal rate in three 85¢ steps, to $9.80 an hour, over three years, then adjust it annually to keep pace with the cost of living.

Its argument, “an economy that’s based on a much more economically viable connection between what used to be called a fair day’s pay for a fair day’s work,” has caught on with the 4,000 organizations and individuals who have signed on with her network, including Lew Prince, a co-owner of Vintage Vinyl, a $1.7 million independent music store in St. Louis. He pays his 16 full-time employees $12 to $17 an hour and his eight part-timers $8.50, he says, and he has become an evangelist for the minimum wage increase, trying to persuade fellow small business owners who are skeptical to support it. “I get incredible continuity by paying people fairly. The longer they’re here and the better they’re treated, the more likely they are to take ownership,” he says. “My employees really run my business while I concentrate on logistics and predictions. I have not had a case of internal theft in decades.”

Brian England, who founded $2.2 million British American Auto Care in Columbia, Md., in 1978 and has 20 employees, says he didn’t consider it a burden when minimum wages were increased regularly. “People used that as a time to review wages generally, and everybody went up. Now the people at the bottom are so far behind, they need a chance to catch up,” he says. ...

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http://www.businessweek.com/articles/2012-08-17/why-a-minimum-wage-increase-divides-small-business

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