Businesses grow faster in states with higher minimum wages, according to a new study.
As more states proceed with minimum wage increases on their own, 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, a nonpartisan research and education organization based in New York, found that businesses employing fewer than 50 people added more new jobs in states that have raised wages.
With higher base wages, the study contends, retention is improved, and businesses ultimately save money on hiring and training new workers.
“I was surprised at the consistency of the results,” said James Parrott, an institute spokesman. “The data was studied in many different ways and no matter where you cut the data the results were the same.”
An initiative petition drive is underway in Oklahoma to place an increased minimum wage on the ballot in November.
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.