Raising the Minimum Wage Means a Stronger Bottom Line

by Gina Schaefer on January 30, 2014 · 3 comments

The author, Gina Schaefer, is the owner of A Few Cool Hardware Stores, a group of nine Ace Hardware stores in Washington, D.C., and Maryland.

As a small business owner, I am a firm believer that raising the minimum wage is the right thing to do. It will mean more money in the hands of those who need it, allowing them to pay for daily necessities without sacrificing their other basic needs. And increased wages means more money in peoples’ pockets that they then put back into the economy, which is good for businesses.

I have heard numerous debates regarding the minimum wage increase, all starting with the same series of questions: “Won’t higher labor costs be a drag on your bottom line? Won’t a minimum wage increase affect employment? Won’t you have to cut back on hours, slow your hiring or even lay people off?”

Gina Schaefer and Secretary Tom Perez at a meeting with small business owners about increasing the minimum wage Jan. 23, 2014.

In my experience opening and running hardware stores in Washington, D.C., and Maryland, I’ve learned a thing or two about wages and the bottom line. Nearly all of my employees earn $10 or more per hour and here’s what I know: providing higher than minimum wages sends a message that we value our employees. We value them as assets to the business because we know they are the people who are on the front lines with our customers.

Higher wages lead to happier employees who stay with me longer, and reduce my turnover and training costs. Because they stay on the job longer, they develop a robust knowledge of the products we sell and the services we provide. That knowledge, combined with the fact that they’re happy to be earning above the current minimum wage, means excellent and enthusiastic customer service. Better customer service means a stronger bottom line. Need proof? In just 11 years, I’ve gone from would-be entrepreneur to owning and running 9 stores.

Moreover, I recognized some years back that the minimum wage just wasn’t keeping up with the cost of living, especially in an expensive city like Washington I wanted to grow my business and to do so, I needed to attract and retain good workers. It turned out that paying more and slightly increasing my labor costs didn’t mean fewer work hours or reduced hiring. The better we paid our employees the more business we had. The more business we had, the more employees we needed to hire. We now employ 185 people across all of our stores.

So if I’m already paying above the minimum wage, you might wonder: “Why do you care if the government acts to raise the wage floor?”

Ace employees with Secretary Perez

Secretary Perez with employees at the 5th Street Ace Hardware store in Washington, D.C., Jan. 30, 2014.

Editor’s note: Read Secretary Perez’s blog post about his visit to Ace Hardware and Costco to talk about how good wages help workers and businesses.

I’d like to see a leveling of the playing field so that fewer businesses are taking advantage of low wages, which cause workers to struggle to afford the basics and rely on government assistance. I want more money in the hands of the people in my local community that they in turn could spend in my store. Low-wage workers might not make major home improvements, but they do buy snow shovels, light bulbs, cleaning supplies and, of course, hammers, nails, nuts and bolts.

Increasing the minimum wage sends a message that we want to reward our employees for the hard work they do. Paying them a decent wage might allow them to support their families without aid for the first time in their lives and help them feel good about working hard to reach that goal.

Since the last increase in the minimum wage nearly five years ago, workers have experienced a decline in its buying power as costs for the basics have gone up. Frankly, since 1968, the buying power of the minimum wage has been on a steady decline. Raising the federal minimum wage to $10.10 per hour would just about eliminate that 46-year decline in purchasing power and even lift up those who are currently earning slightly more than the minimum wage. As a matter of fairness to workers, we need to increase the minimum wage. A full-time worker who’s doing the right thing should not have to live in poverty.

If employees earning at or near the minimum wage get a little bit more money in their paychecks, whether they’re a high school student, recent college graduate or a 45-year-old with a family then they’ll end up spending it where they live. That’s not just good for our communities, but it’s great for our national economy which is driven by consumer spending. And that’s a stronger bottom line for all of us. It’s time to raise the wage.

Learn more about the minimum wage, and join the conversation about this issue on Twitter using #RaiseTheWage.

 

{ 3 comments… read them below or add one }

1 R L Roberts January 31, 2014 at 9:17 am

In introducing your comments in the Department of Labor’s newsletter, their first statement was “A majority of small business owners say they support an increase in the minimum wage.”
Does anyone have the empirical data, or at least the source, that factually supports such a claim or was it just an individual’s unqualified opinion?

2 Ray Wake January 31, 2014 at 9:28 am

The local Ace Hardware in our town advertises buy local then when it’s time to have work done on their own buildings they hire outside of area people to do their work. I personally will never shop at a Ace Hardware store again. I gave them back my Ace card and ask my members not to shop there again. The True Value Hardware Stores hire local people to do their repairs. Ace is a bad word in my opinion they are hypocrites’ they talk and advertise one way then do just the opposite.
Ray

3 Mark Burgess February 21, 2014 at 11:10 am

If this owner currently pays their employees nearly $2.00/hour above the local minimum wage, are they prepared to give their employees at that level all a $2 raise to maintain their standard above the minimum wage? What about those making $12/hour in their stores? Will they also be given a raise to maintain a level above the employees who are going to get that $2/hour wage increase to remain essentially the same level above mandated minimum wage laws?

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