114 North Alfred Street
Alexandria, Virginia 22314

Is Increasing Minimum Wage Hurting Small Business Owners? Franchise Owners?

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Pet Store | Heidi MeinzerAs a small business owner in Alexandria, Virginia, I understand the challenges many face when running their own company. If you are a small business owner, one such challenge you likely deal with on a regular basis is the question each employee is always asking—vocally or not.

“Shouldn’t I be paid more?”

A recent move by the city of Seattle has small business owners everywhere—particularly franchise owners—deeply concerned. The Emerald City raised its minimum wage to $15 an hour.

An article from Bloomberg Businessweek clearly outlines the ripple effect of this issue. Let’s say, for example, Virginia followed Seattle’s example. Now picture a corporate-owned Starbucks, a Burger King franchise, and a local pet store, all on the same block. According to the law Seattle has adopted, by 2017, the Starbucks and Burger King franchise will have to pay worker’s $15 an hour, minimum.

In reality, lumping franchises with their corporate brands is not at all what local owners want. According to the article, most franchisees consider themselves quasi-entrepreneurs and are not raking in giant profits. For example, our hypothetical Burger King franchise owner, with a few employees, may be earning between $50,000 and $75,000 annually. Having to pay such a high minimum wage would obviously cut into their earnings.

Franchises would rather be grouped with local small businesses, such as the local pet store in our Alexandria example. According to the new Seattle law, these types of business have until 2021 to absorb the minimum wage hike.

As you can see, minimum wage issues are something you should be thinking about as a small business owner, as the topic is becoming somewhat hot within many media circles. Will hikes be coming to Alexandria, or cities nearby, following in the footsteps of Seattle?

As a small business lawyer, I’d greatly appreciate hearing your take on the matter. How will this affect our community? Currently, the minimum wage in Virginia, including here in Alexandria, is $7.25 per hour. Should it increase? If so, by how much?

 

Photo Credit: JeepersMedia via Compfight cc

 

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About Heidi Meinzer

Heidi is an attorney and animal lover, not necessarily in that order. She handles small business, animal law, and nonprofit legal issues. She is licensed to practice in Virginia, Maryland, the District of Columbia, and Washington State. Heidi is also a certified dog trainer. Heidi Meinzer's Google+ Profile