EVERYTHING money
ON SMALL BUSINESS
interview and hiring
processes, plus training
and ongoing provisions
is an investment. Add
to that meeting payroll,
including FUTA, SUTA,
workers’ compensation,
social security, Medicare,
healthcare (if over
50 employees), plus
the mortgage/lease,
insurance, utilities,
inventory, maintenance,
and other costs not
accurately captured in
our current tax code —
the emotional cost, risk
and toll that business
ownership can take on
one’s personal life —
and it’s easy to see the
temptation of a small
business owner to throw
their hands up.
In some cases, it can
take selling $250,000 in
product to make $20,000
— a net profit of 8%.
It takes more and more
money to make money.
From an employee’s
point of view, working
40 hours per week
at Florida’s current
minimum wage of
$8.46 per hour yields a
monthly $1,354 gross.
The tipped minimum
wage in the service
industry is $5.44.
Without tips, that’s $870
monthly before taxes.
The costs of healthcare,
medication, food,
utilities, transportation,
and personal needs
added to housing far
outweigh minimum
wage income. An
individual cannot
survive long term on
minimum wage.
So, where does that leave
us? The intent of those
who advocate to raise
the minimum wage is to
raise the pay of the poor,
which is a great cause.
But, the real unintended
Each time the minimum wage
debate resurfaces, I think of this quote
from someone I know: “If your outgo
exceeds your income, then your
upkeep will be your downfall.”
Not long ago, the minimum wage issue was framed in terms
of “labor vs. management,” much like union negotiations.
But these days, every business owner I know wants to pay
their employees more. But costs are a roadblock.
The old paradigm “labor vs. management” is now a
false dichotomy. The true issue has become: small
business owner and employees vs. monetary inflation
and increasing price of goods.
From a business owner’s perspective, keeping
employees happy is essential. Turnover is costly. The
consequences of
significantly raising the
minimum wage is job loss,
meaning we have lowered
the pay of the poor rather
than truly giving them
the advantage they need.
So how can we raise
minimum wage without
putting everyone out of
business?
In 2004, Florida adopted a
constitutional amendment
that established a $6.15
minimum wage and
indexed it to inflation.
Every state sets its
minimum wage, and tying
it to inflation is wise.
However, inflation as
defined by the USDOL
has been statistically
manipulated so it doesn’t
capture true inflation.
The cost of living has
increased, depending on
location, between 8% and
14% annually, but wages
and portfolios have not
kept up. True monetary
inflation and the true CPI
are engulfing both business
owners and employees,
eating away at the wealth
of our country.
It is time we look to better
measures, such as the
Chapwood Index, to set
our monetary policy as
a nation and reframe the
minimum wage debate.
Until we address the root
of our monetary issues,
there will be no winners.
In other words, we must
address our monetary
inflation and our CPI
accordingly, or else
our “outgo will exceed
our income, and our
upkeep will become our
downfall.”
Minimum Wage’s
Maximum Impact
As president and CEO of the Melbourne Regional Chamber of Commerce,
Michael Ayers is a strategic leader with experience managing government
agencies, political campaigns and community-based organizations. He has
spent over 17 years in government relations, management, and political
marketing throughout Washington, D.C., Illinois, Tallahassee and Brevard
County. Michael started his career as a congressional aide and spent several
years running political campaigns.
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