The debate over minimum wage is a heated one, with valid arguments on either side. Of course there is the economic issue, with opponents arguing that ultimately minimum wage increases stunt job creation while at the same time sparking rising costs for consumers. When wages are raised, they contend, there is an increased labor cost associated with the increase. Menu prices go up within a very short period of time, and soon everything costs more. It doesn’t take long before wages earned by employees are soon eaten up by the rising cost of living. The threat of layoffs is also more imminent, according to some opponents, as operators can only raise menu prices so much before business begins to fall off, leaving them no choice but to pursue other savings avenues. Although eliminating or halting hiring may be a last resort, it still may be the only option remaining to restaurant owners who are struggling to meet their bottom lines.

Conversely, proponents argue that increasing the minimum wage will stimulate the economy by simultaneously increasing consumer spending, especially in their local communities. Minimum wage workers right now are simply trying to get by, to make ends meet, to survive…let alone putting any money back in to the local economy. A raise hike will give these employees a spending cushion, proponents contend, that will filter into the economy. And many restaurant owners agree. Tony Crump, restaurant owner in Tempe, Arizona, pays his employees nearly $2.00 more than the standard Arizona wage. He says, “I’ll pay a little more and expect a little more.” What’s more, Crump believes that a raise in minimum wage will actually help his fast-casual restaurant, seeing it as “an opportunity to gain even more ground with a quality product and service.”

There is another side of the minimum wage debate, though, a human side that can’t be overlooked. While many people think that minimum wage affects mostly the teenaged working population, research shows a different story: according to the Coalition on Human Needs, “the average age of workers who benefit from raising the minimum wage…is 35 years old. More than a third of workers affected are at least 40.” They argue, too, that more than two decades worth of minimum wage increases shows no negative effects to job creation in the US. Economy aside, the extra money invested in employees stands to have an even larger psychological effect—an overall sense of happiness. Psychology Today believes that a higher minimum wage has the potential to:

• Decrease family stress
• Give individuals more spending power
• Have a positive impact on self-esteem
• Make people feel they are being treated fairly

Economic wellbeing and psychological wellbeing go hand in hand, and “the problem of happiness is closely linked to the process of social comparison.” Being fairly compensated for their work can lead a person to feel more confidence and self-respect, and thus put them on the road toward happiness.  Ironically, this could result in positive changes for restaurants, even if prices are slightly elevated. In general, when a person feels appreciated, they may work harder, and high turnover rates may eventually dwindle. And the changes will ultimately be felt by the customers who frequent establishments—they may be more inclined to visit your restaurant because of the quality of service they receive, or maybe from the smiles they are given by the happy employees who work there.

Where do you stand on the minimum wage? Do you think it will help or hurt the economy? Will you try to keep wages low so that operating costs will remain low? Or will you do as Crump does, pay more and expect more?

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