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A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
National Minimum Wage on the Verge of Increasing
It’s been over 10 years since the national minimum wage was increased. Ten years! I find that simply astounding. The cost of living has gone up in that amount of time, without a doubt, but the income that many families generate hasn’t budged. There is something very wrong with that picture and the Senate is pushing for a change.
The plan is to increase the current minimum wage of $5.15 per hour to $7.25 in three increments over the next two years. I like the idea of easing into the change, so that small businesses can adjust accordingly. The Senate bill also includes some tax breaks for small business to ease the transitional pain, while hitting up the large corporate businesses for more money to balance things out.
The bill currently under examination will no longer allow corporations to deduct the cost of jury verdicts or out of court settlements in lawsuits, generating an estimated $540 million over the next ten years. A beautiful plan if you ask me. Even though I work for a law firm that represents local corporations, I think that a corporation that is found guilty of wrong doing in a jury trial should not be allowed to deduct the funds it has to pay out from the judgment. It seems to defeat the purpose of punishment.
Also, the tax-defered portion of severance or retirement packages given to former corporate executives will be limited. Instead of all $210 million like former Home Depot Chaiman-CEO Bob Nardelli received (don’t even get me started on that one) being tax deferred, the amount defferable would be limited to $1 million a year or a figure equivalent to the five year average of the receipient’s taxable salary. Another brilliant idea, especially since it is expected to generate $810 million in revenue over the next 10 years.
What’s funny to me is that those in the Senate who are against the minimum wage increase claim that the beneficiaries would likely only be teenagers with part-time jobs, rather than the working poor. Uh, hello, I beg to differ! As one whose husband stocks shelves in a grocery store to help pay for college, I am well aware of the fact that the minimum wage increase would be highly beneficial to our income.
Additionally, there are plenty of people working at McDonald’s that do so full time to support a family who would benefit from the increase. I used to work in day care, and even those teachers are barely paid just over minimum wage (around $6 an hour), at least where I’m from. Explain to me how these people wouldn’t benefit?
The House version of the bill doesn’t include tax breaks for small businesses (boo), but they plan to address those issues in a separate bill. This will cause a bit of a slow down between House and Senate in getting the bill passed on to the President, but ultimately I think both the increase and tax breaks will become law. Congress would be imbeciles not to pass them. It’s simply time for it.
• AOL Small Business: Minimum Wage Bill Divides Businesses
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