It was reported this morning that Governor Quinn's desired minimum wage increase would raise an individual's annual income $4,000 per year. I'm sure that all minimum wage employees are looking forward to this additional $75 per week income.
But look at it from the small business owners perspective. I'm not talking about the large corporations such as McDonald's or Burger King. I'm talking about the small "Mom & Pop" shops. The neighborhood bakery, florist, and independently owned franchisees. These are the establishments owned by families that have taken the risks to start their own business, secured expensive loans, and personally guaranteed these loans with their homes and savings to bring you the services you enjoy. Most employ 10 or less employees. But a $4,000 a year increase for 10 employees is a $40,000 payroll expense for these businesses. This does not include the owner's increased expenses of taxes and workman's compensation insurance.
So where does the small business owner find the extra $40,000 to pay these employees? They can raise prices, reduce their workforce, cut back on quality or quantity, or absorb it as a pay cut to themselves. In reality, most small business owners struggle to earn $40,000 per year.
So while the larger corporations may be able to absorb this minimum wage increase, the small business owner will see the elimination of some or all of their income.
Politically a good move for Governor Quinn, but in reality the death of our entrepreneurs.