The recent sweep across the nation to increase minimum wage has been affecting both large and small businesses. The increase, which began in January of 2015 for the state Massachusetts, is now at an all-time high of $9.00 an hour for minimum wage workers. But the wage increase doesn’t stop there. Over the next few years, Massachusetts employers can expect to see two new wage increases. In January 2016 wages will be raised to $10.00 an hour and in January, 2017 wages will be raised to $11.00 an hour.
Ramifications of Minimum Wage Increases
Many businesses will undoubtedly be affected by these mandatory wage increases, and many may be forced to increase the prices of their goods and services in order to offset their increased payroll costs. For those businesses who are competing on price, this could have the compounding negative effect of increasing the cost-to-customer creating a competitive disadvantage.Additionally, this minimum wage increase may force business owners to demand existing employees be more productive because increased payroll costs for existing staff have the potential to preclude additional staff from being hired, even if the company workload increases.This Wall Street Journal article addresses how some small business owners are rethinking their business models and the way they allocate staff in an effort to keep payroll costs low.
