The Growing Debate Over Minimum Wage
The question of raising minimum wage has become a prominent issue, with elected officials and organizations across the country actively engaged in the matter.
This is a complex issue. While independent booksellers understand the importance of fair and completive employee compensation, a minimum wage increase that is too drastic could result in reduced staff hours, lost jobs, or, worse, a store going out of business. Indies have little price flexibility, so arguments that they can simply raise prices to cover the increased wage aren’t grounded in economic reality. Main Street stores are competing with online merchants, many of which feature discounted prices and the appeal of purchasing from online retailers that are not collecting state sales tax (yet another reason to support e-fairness!).
What does this mean for your business?
It’s important to get involved as early as possible in policy discussions regarding increases in the minimum wage. Only indies know what they can -- and cannot -- afford. The goal here is to ensure that when the policy discussion begins it is based in solid business and economic principals. Unrealistic expectations about steep immediate wage increases won’t work, but it’s unreasonable to expect an elected official who has never run a business to understand that. You need to educate politicians and/or key decision-makers on the financial realities of an independent business.
Tools to Help You Get Involved
With that in mind, ABA is providing indie bookstores with some tools and tips to help you become an active participant in any wage increase discussion that occurs in your area. (Importantly, any indies who would like to add to this page are invited to do so, and should contact ABA Senior Public Policy Analyst David Grogan at firstname.lastname@example.org with their thoughts and comments.)
Minimum Wage Impact Calculator — Don’t just assume your town leaders or the editor for the local press understands how a small business runs. You need to show them, and let them know exactly what happens when a wage increase is too drastic.
To help with this, ABA has created an Excel tool using ABACUS bookstore data. The Minimum Wage Impact Calculator can help: 1) give you a rough estimate as to what the impact of a given wage increase will be and what wage increase you could likely handle; and 2) provide you with a powerful interactive tool that you can use in meetings with lawmakers or others to illustrate how increasing the wage of one or two minimum wage workers affects the entire bottom line.
- The Indie Fact Sheet — Here is a handy leave-behind that will provide your lawmaker or the key decision-maker on the minimum wage discussion with basic, but important, facts about how an indie operates.
- Tips on an Effective Meeting With Your Elected Officials — Meeting with elected officials can be a valuable opportunity to communicate important facts about policy and legislative-related issues and to help gain their support for proposed legislation. These tips and suggestions will help you make the most of these important meetings.
General Tips & Things to Consider
- Discuss this issue with your retailer neighbors. As with any advocacy campaign, it helps to have a diverse group. You don’t want decision-makers to see this as only a “bookstore” issue. It may be cliché but it is no less true: There is power in numbers.
- Set up a meeting between your lawmaker or task force chair and you and your fellow retailers to discuss the wage impact. Meet with them at their local office or invite them to your store. Bring the “Small Business Tip Sheet” and a laptop to run the Minimum Wage Impact Calculator.
- Use the Impact Calculator to show your legislators, the media, and town officials that a wage increase has a ripple effect, forcing business owners to raise the wages of more senior staff. Use the spreadsheet to illustrate what would work … and what won’t.
- Explain that few Main Street retailers have the luxury of raising prices. Remind your legislators that you are not simply competing with the bookstore 10 miles away but also with large corporate online retailers, which in many states are not collecting sales tax.
- And if a store can raise prices, this price increase may limit how much money a consumer spends elsewhere, thereby hurting community retailers indirectly.
- Participate in public forums regarding wage increases to state your case. Bring your fellow retailers.
- DO NOT react defensively to criticism, especially if you are speaking publicly in opposition to the amount of a wage increase. Vocal proponents of a wage increase may accuse you or your business of things you do not appreciate, and most certainly, know to be false. It is important to present an argument based in facts. Stress that you are not opposed to a wage increase, but that if the increase is too drastic and too fast, it would defeat the purpose by forcing small businesses to cut staff.
- If you do not make any headway in minimizing a wage increase you believe will be harmful, see if you can work with decision-makers to mitigate other costs (e.g., regulatory or licensing fees, tax abatements). Communities will often entice remote retailers with incentives to do business locally – and it would be good to remind town officials that, according to Civic Economics, Main Street retailers have three times the economic impact as a chain store. See if there are costs that could be mitigated to make the wage increase happen.