In early October 2018, Amazon announced that they would raise the minimum wage for every employee in the United States to $15. Obviously, this is great news for worker conditions and the American job market in general, but how will it affect the rest of the world? And more importantly, how will it affect small business owners?
In order to try and figure this out, we contacted the financial experts over at BullMarketz.com and asked for their opinion.
American Minimum Wage
The American minimum wage system is a unique system in many ways, and it’s something that has been debated a lot lately, especially during the last two presidential elections. The reason being that the federal government’s minimum wage level of $7.25 hasn’t increased in correlation to living expenses, making it harder for workers to survive on today’s wages.
Currently, there is a debate going on where the Democratic Party wants to increase the nation-wide minimum wage to between $12 and $15, while the Republican Party is mostly against a raise at all.
One of the biggest advocates for the $15 minimum wage is Senator Bernie Sanders. For the last couple of years, Sanders has called out CEOs and business owners for their lack of consideration and attention to this matter in the interest of their workers. Jeff Bezos has been one of his main targets.
Amazon Takes the Reins
On October 2, 2018, Amazon and its CEO, Jeff Bezos, finally decided to listen to the people and announced that Amazon are raising the minimum wage for all of their American employees to $15 an hour.
It was an unexpected move that caused mixed reactions in the United States but also abroad. Workers and other spokespeople for human rights and Unions around the world declared it a huge victory, while certain politicians and business people were devastated. Among the people celebrating we find Senator Sanders, who even personally addressed and thanked Bezos for the decision.
The questions that everyone is asking now is, what does this mean and how will I be affected?
The Impact On Small Business Owners
Small business owners from all over the world can expect to notice this change. Maybe not immediately, but sooner or later the impact will spread, so let us take a look at the possible changes that could happen.
- In the United States
As a small business owner in the United States, you might not be directly affected, at least not yet. No policy change has been planned on a federal level and the official minimum wage will stay where it is for now. However, since one of the largest companies in the country has decided to raise everyone’s wages, people in other industries will be expecting some change for themselves.
This might be the start of a major shift. Earlier this year, Amazon’s competitors Target and Walmart declared that they were planning to raise the wages for their employees too, but not until 2020. Although after this power move, they might be pushed to act sooner rather than later. In turn, this could create a butterfly effect, and at some point within the next few years, we could potentially expect to see changes to the federal government mandated wages as well.
If you’re running a small business outside of the United State, you will most likely barely notice the change. For example, in Europe, the minimum wage is already much higher than in the US, and workers rely on the Unions to mandate wages.
A more likely outcome, especially if federal policies are changed in the US, is that prices will increase. When companies have to pay more for their staff, they will be forced to raise prices, and if you import from the United States or pay for services in the country, you might see a difference in cost.
Regardless of what you personally think of this change, we can all agree that it’s a huge change that will ripple across the world. Whether or not you as a small business owner will be affected is yet to be seen, but it’s time we all start to plan for what is to come. The discussion regarding minimum wage in the US has been on the table for too long, and change is around the corner, especially now.
Therefore, as an American business owner, you should expect to see your required wages increase within the next few years, while business owners elsewhere in the world could expect to see prices for American made products increase.