“You have to spend money to make money.” This is the motto businesses live by. Sales are their lifeblood and a saving done at the expense of sales is no saving at all.
And yet too many of those businesses managed to forget this iron rule when it came to wages. Wages and sales are intimately tied. Wages are what allow people to shop, and to spend — and how much.
Yet, since there is no direct correlation between a business paying a certain wage and its sales, too many think nothing of saving on labor costs. And it would work, if no one else did it. But each business that thinks that paying low wages is a great idea shrinks the pool of buyers and contracts sales, even by a bit, for everyone. And as more and more do it, the pool shrinks and shrinks until it becomes a muddy spot.
This is why places where the minimum wage was raised are seeing a strengthening economy, and yes, rising employment. Every business suddenly had to pay more, every business had to spend more money, and, when the buyers’ pool became larger, every business saw its sales grow, and the rule worked again. They spent money and made money.
Let our legislators consider this when the subject of raising the minimum wage comes up.
Adriana I. Pena