Recent legislation in 13 states to raise the minimum wage, various increases in some cities across the country, and news that an executive order may soon mandate an increase on federal contracts, means small business owners will face yet another challenge to build, sustain and grow their business in a difficult economic environment.
If the federal minimum wage increases, 31 states that do not have a higher minimum wage would be mandated to a new federal standard. Right now, the Congressional wage bill is seeking $10.10 as the federal minimum. In an election year, expect to hear a great deal more on the subject. Small business owners can take steps to mitigate the impact.
Whether you’re in favor or against minimum wage hikes, few would argue that small business owners, in comparison to large corporations, often face greater challenges to absorb increased costs to run their businesses. Margins, pricing, cash flow and credit access already loom in the background for small business owners. As a result, increased regulatory pressures may place a disproportionate burden on these businesses.