Higher Minimum Wage Helps Small Businesses
According to an article on Inc.com, a new study shows that small businesses grow faster in states with minimum wages above the federal level, which has remained at $5.15 since 1997.
The study, conducted by the Fiscal Policy Institute, found that businesses employing fewer than 50 people added more new jobs in states that have raised wages. The study indicates that employee retention is increased and businesses save money on hiring and training new workers because of higher base wages.
According to the article, Massachusetts is the latest state to take up the issue, with the state Senate voting to raise the minimum wage from $6.75 an hour to $8.25 by September 2007, which would make it the highest in the nation. Under the proposed bill, future minimum wage increases starting in 2008 will increase automatically with the rise in inflation. House lawmakers still need to negotiate the bill and take a vote for it to pass.
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