Raising the minimum wage would either be a job killer or a stimulator for the economy depending on who you talk to. The proposed increase to the federal minimum wage from $7.25 an hour to $10.10 is being considered by Congress.
During the State of the Union address President Barack Obama announced plans to raise the minimum wage for new federal contract workers to $10.10. He also asked Congress to pass legislation that would raise the minimum wage for all workers in the United States.
“It really hurts our main street businesses hard at their bottom line,” said Bill Smith, state director for the National Federation of Independent Business. “You know if you increase the minimum wage, you increase labor costs for small business which really are 80 percent of the cost of owning and operating small businesses. If you don’t have more sales or more service appointments to support that increase that business is going to be less profitable, they are going to be less competitive with the big business and sooner or later you are going to stifle job creation in small business growth.”
Smith points to a study by the Employment Policies Institute that said an increase to the minimum wage would result in the loss of one million jobs nationwide.
Those results are contrary however to what Ian’s Pizza, a small Madison business has seen in the last 13 years. While the current minimum wage is $7.25 an hour, Ian’s starts all employees at a higher rate.
“We actually start people at $8.25 and then the average salary for people who work either as cooks or front of house is about $11 an hour,” said Staci Fritz, manager of Ian’s Pizza. In addition, all Ian’s Pizza employees receive fully paid for health insurance coverage.
Fritz said paying a higher rate helps them retain valued employees and leads to a better work environment.
“We want our people to come to kind of make it their own, and I think in for order for people to take that ownership you have to show them that you respect them. One way you can do that is pay them a little more money,” Fritz said.
Just as analysts have credited some of the success of retail giant, Costco on their higher compensation for employees Ian’s Pizza is making the same case.
“If you’ve got people that are engaged and like coming to work and like what they do everybody’s going to have a better time, including our business,” Fritz said.