A few days back we read some comments from local business leaders in the area concerning the potential rise of the minimum wage from $8.25 per hour to $9. They suggested they will need to raise prices in order to maintain their profit level. They overlooked the proven fact that consumer spending is the biggest driver of our economy. Period. A person or family living on the minimum wage will almost, without exception, spend that additional $30 a week, and they will spend most of it in the local economy. They are not about to take a trip to Europe and spend it over there.
How many people in this area are currently receiving the minimum wage? All of them would receive that $30 a week pay increase, and most all of them would spend it. What would that do for the bottom line of the small business in our area? Their profit will go up because of higher sales volume. A lot? Probably not, in that $30 isn't a lot of cash, but you will not have to raise prices in order to maintain your current profit levels. Your increase in sales profit is likely to be much more than $30 a week.