As an entrepreneur, it’s always a bit of a testy conversation when it comes to increasing the minimum wage. While I understand the benefits for a large corporation, when it comes to a small business making 6 figures, the addition of a few bucks an hour can mean the difference between a success business and one that is out of business.
A recent USA Today article furthered this by pinpointing the struggles of small business owners in a market that is seeing rising wages nationwide. According to USA Today, small business “are falling behind larger companies in the race to raise wages, making it even harder for them to attract a shrinking pool of available workers now that unemployment has reached a 50-year low of 3.7 percent.”
“In the third quarter, annual wage growth for businesses with 49 or fewer employees averaged 2 percent, according to figures from payroll processor ADP released Wednesday. That compares with 3 percent pay gains at companies with 50 to 999 workers and 4.8 percent average salary increases at firms with 1,000 or more employees.”
This disparaging gap is showing itself even more as, over the past year, small business employment grew 1.2% while large companies saw an increase of 2.5%.
Small businesses are competing as best they can however. For example, the current pay gap has for hourly earnings in the third quarter averaged “$25.56 at small businesses and $28.84 at large ones.” It will always be an uphill battle for small businesses when it comes to wage gap. In my opinion, small employees should receive some type of benefit for working for smaller employees includnig lower taxes, government incentives, or other. I have long given up hope competiting for the top talent unless I’m giving away the farm, if you will and there should be some way to at least assist in this competition. Otherwise, small businesses will lose every time.