While House Republicans thwart Democratic efforts to pass an increase in the minimum wage, their natural allies – business groups – are divided on the issue and seem much more willing to compromise.
The National Federation of Independent Businesses, the largest small-business organisation in the United States, mounted aggressive opposition to a wage hike proposal that now appears stalled in Congress.
Jack Faris, president of the 600 000-member group, predicts that many marginal small companies would be forced out of business if the minimum wage is increased from $4,25 an hour.
But, in contrast to the federation’s intense campaign opposing a minimum wage hike, other small-business associations have kept a stunning silence on the issue. The National Association of Women Business Owners, the National Association for the Self-Employed and the American Franchisee Association, among others, have taken no official position.
The reason is that, the federation’s claims notwithstanding, small-business owners are not monolithically opposed to a minimum wage increase. Many small-business groups say their members are split on the proposals.
“For most small businesses, it’s not an issue because most pay more than minimum wage,” said Scott Hauge, who oversees legislative affairs for the 125 000-member California Small Business Association.
Only about 5,3% of hourly paid workers, or 3,6-million nationwide, receive the $4,25 minimum wage, according to 1995 data from the federal Bureau of Labour Statistics. Although no data exist for workers paid by piece-rate or job, or who receive a salary, federal economists believe the same percentage holds for a total of 6,6-million working at the minimum wage.
Several proposals to increase the minimum wage are on the table. At the federal level, Democrats pledged to continue their fight for President Bill Clinton’s proposal to increase the minimum wage by 90 cents to $5,15 hourly. Meanwhile, House Republican leaders fended off an effort by moderate Republicans for a $1 increase.
Economists disagree about the extent to which a minimum wage increase would cost jobs or hurt businesses. For small-business owners, the question boils down to what industry they are operating in or their political views, advocates for small business say.
Small-business owners using higher-wage, specialised workers in high-tech or consulting industries are likely to be indifferent to minimum wage issues, Hauge said.
But restaurant operators, small manufacturers and retail shop owners who rely on minimum wage workers are likely to strongly oppose increases, he said.
Yet even in those industries, business owners may start their workers at minimum wage but raise their pay relatively quickly, so that many small-business owners are already paying above the minimum wage, Hauge said.
Karen Caplan, president of the Los Angeles chapter of the National Association of Women Business Owners, said a January survey found her members to be split nearly down the middle, with 55% opposed and 45% in favour of the increase.
The reason many women business owners favour a wage hike may be because they are more likely to run service or consulting businesses that employ higher-paid administrative workers rather than the low-skilled or non-skilled labourers, Caplan said.
That is also a consideration for ethnic or racial business associations, such as the 1 500-member Black Business Association and the
2 500-member Latin Business Association, two Los Angeles-based organisations that support a minimum wage increase.
Frank Moran, head of the Latino group, said his members not only view the issue from a cost perspective, but with a keen sensitivity to the plight of industrial labourers, many of whom are Latinos. He added that the group would like to see other measures that would make life easier for small businesses such as health-care reform and substitution of time off for overtime pay. – Los Angeles Times