Many people believe raising the minimum wage would cost jobs, but there are signs that isn’t true. Critics have said a higher state minimum could make Arkansas employers cut workers. But studies say that hasn’t happened in other places. And at businesses like Punch Pizza in Minnesota, owner John Puckett said they’ve made back the cost of their increased wages by having a better and more stable work force.
Puckett said they knew it would be a big investment for a small company to pay their new hires $10 an hour.
“So, it only makes sense from a financial standpoint because it will enable us to keep people, keep our best people, and attract great people to our company.”
According to Stephen Copley with the “Give Arkansas a Raise Now” coalition, economists have compared states that have raised their minimum wage to neighboring states that haven’t. He said they’ve often been surprised to see that increasing low-end pay hasn’t cost jobs.
“This idea that it’s going to cut into jobs doesn’t materialize,” he said. “In fact, the studies have shown that it doesn’t do any damage to the economy. In fact, it probably helps businesses.”
Some very successful businesses in the service sector pursue a conscious strategy of investing more in their low-wage employees. John Puckett said they looked closely at the results for two big companies before taking the step themselves.
“We’re doing it not only to reward our good staff, but when we look in the future, we think, like, what it’s done for Costco or In-N-Out Burger,” he said. It’ll enable us to build a better company by having better people.”
Economists have cited reduced turnover costs, and Stephen Copley said a higher minimum wage also means better morale and more demand for many businesses.
“Workers were happier, more motivated. If you’re in a retail business it helps, because there’s more money in the economy, people have more money to spend,” he declared.
In Arkansas, the current minimum for some small employers is a dollar an hour below the national minimum wage. A proposed state ballot referendum would raise the minimum for everyone to $8.50 an hour over three years.