Saturday, October 30, 2004
Copyright © Las Vegas Review-Journal

Some small businesses back wage boost

Several owners hold news conference to show support of passage of Question 6

Raising Nevada's minimum wage would not only increase worker productivity and loyalty, but it is the "right thing" to do, several local businessmen said Friday during a news conference urging voters to approve Question 6 on Tuesday.

"It is a positive way for our minimum wage earners to help their families meet expenses and inflation that we are all subjected to," John Iorio, the owner of Pumi, said during the news conference sponsored by the Nevada Small Business Alliance at his Henderson restaurant. "And it is another avenue for us to keep qualified employees."

Earl Elijah, president of B.S.U. Corp., a Las Vegas bookkeeping and payroll company, said that when people are paid low wages, such as the current $5.15 minimum wage, they tend to scout for higher paying jobs.

"In desperate circumstances people will say they are going to stay, but they are canvassing the market for a better job," Elijah said. "I see this issue more candidly than others because people come to me with their taxes and I see their demand for rapid refunds. They need the money."

Elijah said that the significant investment small businesses make in training new employees influences their interest in keeping those employees. The proposed constitutional amendment to raise Nevada's minimum wage by $1 would help businesses retain employees, he said.

"You build a relationship with your employees and they build relationships with your customers," Elijah said. "People like to see the same people. Small businesses are a lot like a family. You don't want to lose the investment of training and customer loyalty to attrition."

Danny Thompson, executive secretary-treasurer of the Nevada AFL-CIO, who attended the news conference, said people need to feel valued in the workplace and a vote yes on Question 6 would be a step in the right direction.

"If work has no value, why work?" Thompson asked.

Thompson said 25 percent of workers earning minimum wage are single mothers and 75 percent are over the age of 25. "We're not talking about eating, they don't put money in the bank. They spend it right here on food and other necessities," Thompson said.

Steve Miller, policy director of the Nevada Policy Research Institute, dismissed the alliance's reasons for backing the proposal, arguing the initiative is really about hurting those workers who are too vulnerable to fight back.

"Why not raise the minimum wage $5 or $10?" Miller asked. "Because then the destructive effect of this would affect a much larger group of people. Middle class peoples' jobs would be on the line. Anytime you kick a market price up by law, in this case the price for labor, you push people out of the market."

The small business organization, the local branch of the nonprofit advocacy group the American Small Business Alliance, said not only is the measure good for workers and small businesses, but it also benefits social government programs.

"This would generate a high tax base," Elijah said. "There would be more money to tax so there would be increased money for Medicare and Social Security.

As rising health care costs continue to be a major issue for workers and employers, the organization said the Nevada initiative might help mend some of worker-employee tension. If the measure passes, employers who offer employees health insurance would be exempt from having to increase their employees' wages.

Elijah said the proposed $1 increase, which will effect an estimated 101,000 Nevadans, shouldn't be considered much of a business expense because small businesses can write off the cost of employee wages.

The business group also argued that it is essential to have an even playing field where all businesses are held to the same baseline salaries.

"Publicly traded companies don't see the workers preparing for the lunch rush," Elijah said. "They see profits and dividends, they aren't going to increase their wages without this."

If the question passes Tuesday, the initiative will need to be approved again in the next election cycle in two years, meaning that workers won't see any change in their wages until 2007.