$15 minimum wage could cripple small business
My congresswoman, Florida Rep. Stephanie Murphy (D-Winter Park), is speaking at a press event Wednesday in support of a $15 federal minimum wage. Her logic seems to be that if Disney can afford to raise its starting wage to $15, other businesses can as well.
But most businesses in Rep. Murphy’s district, or in any congressional district, aren’t like Disney. That includes my small importing business, which I started 20 years ago. If a $15 minimum wage became law, it would crush me.
I own the Mardi Gras Collections, and as our name suggests we specialize in providing fun trinkets (e.g. beads and headbands) for over 600 small mom-andpop stores, as well as several major chains. I do roughly $1.2 million in sales each year, which we accomplish with a small staff that includes an office manager and three part-time warehouse employees.
The importing business isn’t an easy one. I might buy a product for $1 in China and sell it for $2.50 in the U.S., but the difference between the two is quickly gobbled up. A product purchased from China is subject to duties (i.e. tariffs of up to 16 percent), shipping costs, and additional fees to bring the product from the port to my warehouse. After paying rent, insurance, and wages, we’re left with a very modest profit to reinvest in the business and survive another year.
I’ve never thought of myself as a minimum-wage employer; I’ve always paid more than the required state minimum, and I currently pay our warehouse staff $10 to $11 an hour. It’s not an exciting job, but it’s an opportunity to move on to one. A $15 minimum wage would create a serious roadblock in that pipeline to higher pay.
When labor costs go up, I’ve got to find a way to offset it — I don’t just have that money sitting around in the bank. I’m already anticipating higher prices on Chinese goods on account of the current trade dispute. Material costs in China are also rising, which means there’s less room to pass additional increases on to customers. Without that pricing power, it leaves me with little other option but to cut back on my staff.
I’ve thought seriously about what I’d do if faced with a $15 minimum wage. We’d have to let our three warehouse employees go, and my husband and I would basically work seven days a week to try and do their jobs in addition to our own. My husband and I are older, so I’m not sure how long such a schedule is sustainable — but continuing at our current staffing level wouldn’t be an option, either.
The minimum wage debate so often gets defined by unrepresentative examples — by the big businesses like Disney or by the billionaires like Jeff Bezos. But it’s my business, and my many retail customers, who are a more accurate representation of the minimum wage debate. I do not know how $15 became the “magic” number for minimum wage. In Florida, the minimum wage is $8.46 with increases based on the cost of living. So, how do we go from $8.46 to $15?
The market can get us to $15 just fine without the government. I am currently working in Atlanta for a trade show, and there are signs on the subway advertising security jobs for the Super Bowl starting at $16-$18.50. (The minimum wage in Georgia is $7.25!) But if we start trying to mandate our way to higher pay, we’ll wind up with lost jobs and closed doors.
I haven’t heard from Rep. Murphy in the past. Before she holds another press conference or sponsors another bill on $15, I hope she’ll reach out to those businesses who have to pay the cost of her good intentions.