Raising the minimum wage could adversely impact small businesses with narrow profit margins. For instance, a small business owner like Larry, who currently pays workers $10 an hour, would find no profit available if wages rise to $15. This scenario emphasizes the dilemma faced by small businesses, as increased wages could lead to higher charges or expense reductions, potentially driving away customers. If operating costs rise without corresponding income, the business may incur losses, making it hard to meet payroll obligations.
Raising the minimum wage may harm small businesses, especially those operating with narrow profit margins, making it difficult for them to sustain wage increases without cutting costs or losing customers.
For small businesses like Larry's Lawn Care, a minimum wage increase from $10 to $15 an hour could eliminate profits, forcing business owners to increase charges or trim expenses, risking customer loss.
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