Seattle’s minimum wage increased from $9.47 an hour to $11 starting April 1. The judge claims there is no evidence of negative impacts of such a decision and thus went against local franchise owners’ objections. The owners tried to reclassify franchises as small businesses since, they claim, they operate like small businesses more than as a large national chain. But workers claim franchises have resources small businesses do not have. Furthermore, Seattle is raising the minimum wage to $15 an hour by 2017 for large businesses.
Do you believe franchises should be viewed as small businesses? Even if they are, do you believe they should increase wages?
Another blog entry spoke about the Walmart increase in wage. Do you think this is related to what is happening in Seattle?
8 comments:
Firstly, the judge is in no position to make such a judgement as he received a degree in Public Affairs and law, not economics. There could potentially be negative effects of raising the minimum wage, but I agree with raising it.
Franchise owners can still be small business owners or they should be based on the number of employees or sales they bring in.
It would be difficult to tell exactly what raising the minimum wage would do to a city, state or nation. I would imagine at first there would slightly less jobs then eventually stabilize.
I agree with increases minimum wages to keep consistent with the constant rise of cost of living, especially in cities like Seattle. I do find it hard to believe that there will be no negative implications of this. Start up business won't be more hesitant to hire another worker?
I do not think we should be able to consider franchises as all the same. For instance, some franchises are apart of bigger companies, and others are apart of smaller companies and should therefore be treated as what their "mother" store is treated as. I personally do not agree with the increase of minimum wage because it will cut a lot of jobs and many small businesses will not be able to keep up with the drastic increases.
Also, I would agree that franchises should be treated what their mother company is treated as. But, at the same time the nature and the operation of a franchise makes it comparable to small businesses. They are even more at a loss with the increased minimum wage because part of their profits (depending on the agreement) has to go back to the mother company.
However, this might be a step towards reducing income inequality across US.
I do not think franchises should be viewed as small businesses. Ultimately, they are part of a large chain that contributes to an even bigger corporation. On a fundamental level they operate differently than a small business.
I agree with raising the minimum wage because this leads to people wanting to work more. It is difficult to tell what this will do to a city or state, but we will have to wait and see. I believe this will lead to a positive outcome of more people entering the work force and eventually lead to more success of franchises.
In my opinion, franchises should be viewed as small businesses. I know of plenty of individuals that own one franchise store in the restaurant industry. Franchising was the only way they could finance a restaurant they wanted to open. In my opinion, minimum wage should be based on cost of living, but if large firms are beginning this initiative to raise wages, imposing them on small businesses can really be detrimental.
Many studies have been done on the impact of raising the minimum wage and there are many real world examples to use for this analysis. Typically they have shown little impact towards unemployment if minimum wage is raised. But of course, studies on this topic are on both sides of the issue, depending on the political bent of the researcher.
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